DeFi vaults are quietly redefining how crypto yield is accessed and managed. Much like mutual funds and ETFs transformed traditional finance by wrapping complex strategies into simple, tradable units, vaults bring that same efficiency and composability to the blockchain. They automate yield generation, simplify execution, and offer a familiar interface to users and developers alike — all while operating on open, programmable rails.
This report explores the rise of vaults as the onchain equivalent of structured financial products — tracing their evolution from bespoke contracts during DeFi Summer to the standardized, scalable infrastructure powered by ERC-4626 today.
In this report, you'll gain a deeper understanding of the vault landscape, emerging trends, key challenges, and associated risks — along with some of our forward-looking assumptions about where the space is heading. From lending strategies to real-world asset integrations, vaults are becoming the backbone of crypto-native yield — and potentially a $500B opportunity.
Key insights from the Vaults report
- Vault adoption is accelerating — fast: Over the past 12 months, curated vaults have grown 28x in total value locked, jumping from under $150M in June 2024 to more than $4.4B today. This surge far outpaces the broader DeFi market rebound and reflects deepening institutional appetite for onchain income products.
- RWAs are reshaping the DeFi landscape: tokenized treasuries, private-credit funds, and trade receivables now make up nearly 20% of total DeFi TVL. Vaults are becoming the go-to format for structured exposure to offchain yield — and setting the stage for wider adoption of RWA strategies.
- Vaults are scaling to traditional fund size — with DeFi speed: Some single-asset vaults on Morpho now hold hundreds of millions of USDC, with platform-wide deposits nearing $5B — rivaling mid-tier money-market funds, but with instant, onchain settlement and composability.
- Institutional use cases are live — and yielding real results: From Apollo’s 16% APY private credit vault to Coinbase’s $350M Bitcoin-backed loan flow, institutions are no longer just exploring vaults — they’re deploying real capital through permissioned DeFi infrastructure.
- The path to $500B is real: Capturing just 1–2% of global money-market and cash-sweep assets could push vault TVL beyond half a trillion dollars by 2030. Modular design (ERC-4626), smart allocation, and risk-reserve features are building the rails for that future.
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About Kiln
Kiln is the leading staking and digital asset rewards management platform, enabling institutional customers to earn rewards on their digital assets, or to whitelabel earning functionality into their products. Kiln runs validators on all major PoS blockchains, with over $11 billion in crypto assets being programmatically staked and running over 5% of the Ethereum network on a multi-client, multi-cloud, and multi-region infrastructure. Kiln also provides a validator-agnostic suite of products for fully automated deployment of validators and reporting and commission management, enabling custodians, wallets, and exchanges to streamline staking or DeFi operations across providers. Kiln is SOC2 Type 2 certified.
