Grayscale Research highlights a $7 billion sector in decentralized finance that could one day challenge the vast collateralized loan obligation (CLO) market, which dominates traditional finance with an estimated $1.5 trillion in assets. These onchain vaults, operating on blockchains like Ethereum, Base, and Solana, pool capital into curated portfolios that generate yield, similar to how CLOs bundle loans for institutional investors.
According to the report by Grayscale's Zach Pandl, onchain vaults benefit from transparency that traditional CLOs cannot match. Every trade, rebalance, and yield source is recorded on the blockchain in real time, offering unprecedented visibility. also blockchain settlement promises faster and cheaper liquidity compared to legacy systems. Currently, 57 curators manage over 3,000 vaults, with stablecoins making up 79% of deposits, reflecting a preference for yield on dollar-pegged assets rather than speculative crypto exposure.
The role of these vault managers resembles CLO managers who actively allocate capital and adjust strategies based on market conditions. However, regulatory uncertainties in the US remain a significant hurdle for onchain vaults seeking broader adoption.
This material is for informational purposes only and does not constitute financial advice.
