Crypto vaults have grown sharply, with total deposits rising from $4 billion at the start of last year to more than $10 billion, according to the Financial Times. The report said fintech companies, digital asset treasury managers and hedge funds are the main depositors using these products. These vaults operate through smart contracts on DeFi platforms, with each vault overseen by a manager who selects lending strategies, sets risk limits and charges fees. Reported yields typically range from 3% to 10%, while higher-risk strategies can generate returns of 20% or more. The structure also exposes depositors to several risks, including collateral risk, liquidity risk and smart contract risk. The figures point to continued growth in demand for structured on-chain yield products among professional and institutional-style market participants.
Total deposits in crypto "vaults" have increased from $4 billion at the start of last year to more than $10 billion, the Financial Times reported on Oct. 19, according to BlockBeats.
The report said fintech companies, digital asset treasury management firms and hedge funds are the main depositors in these vaults.
These products run through smart contracts on DeFi platforms. Each vault has a manager, similar to an investment manager, who is responsible for choosing lending strategies, setting risk limits and charging fees.
Yields usually range from 3% to 10%, while higher-risk strategies can deliver returns of 20% or more. At the same time, depositors face collateral risk, liquidity risk and smart contract risk.
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