DeFi makes every loan visible onchain. What it does not show is the credit sitting underneath the collateral. Hare, a new platform launched by market maker GSR and liquidity distribution network Turtle, is built to underwrite that missing layer: asset quality, counterparty risk, and how much cash depositors could actually recover in a stressed exit.
The launch arrives as curated vaults are growing quickly. In the third quarter of 2026, deposits in curated vaults rose 28.0% quarter over quarter to $8.96 billion. GSR has committed $100 million of its own capital to support the business over the coming years, and that capital is set to enter vaults ahead of outside money and absorb risk first.
Curated vault growth is accelerating as offchain credit risk comes into focus
Curated vaults can show positions clearly onchain, but the underlying collateral is often a claim on an offchain fund manager or borrowing entity. A block explorer can display the position. It cannot show whether the borrower behind it is actually solvent.
The collapse of xUSD in November 2025 is the example used in the report. When Stream Finance’s xUSD lost its peg, the vault contracts onchain continued to execute exactly as written. The credit layer underneath had already broken. Hare is being pitched as a way to underwrite that invisible risk.
During the third quarter, curated vaults brought in $1.30 billion in new funds, up sharply from $394 million in the second quarter. On a comparable basis, total curated deposits increased 28.0% quarter over quarter, versus just 1.9% in the prior quarter. Token price gains added another $670 million in asset appreciation.
- GSR provides the initial capital.
- Hare handles institutional underwriting.
- Turtle is responsible for deposit distribution and client acquisition.
Hare starts with asset origination and structuring for issuers, while Turtle connects those vaults to a broader base of allocators.
The first two flagship products are set to launch on Aave. USD Earn is designed for large dollar allocations and aggregates major dollar stablecoins into a single vault. Gold Earn accepts PAXG and PAXGy and will begin with zero fees.
Using a 6.8% curator take rate and an average yield of 2.9% in the third quarter, the report estimates that a curator managing $1 billion in deposits would generate about $2 million in annual revenue. The curator take rate was 7.0% in the second quarter. Among top curators earning more than $1 million, take rates ranged from 1.2% for Gauntlet to 11.7% for Sentora.
Figure 1 in the report shows curated vault deposits rising from $7.0 billion on June 30 to $8.96 billion on Sept. 30, driven by $1.30 billion in net inflows, $56.9 million in interest income and $670 million from token price appreciation.
Market makers are moving into curation, and the field is becoming less concentrated
Hare also marks GSR’s formal entry into a curator group that already includes market-making firms such as Wintermute, Galaxy and Keyrock.
Wintermute’s Armitage launched on Morpho on May 19. Its deposits climbed from $56.4 million to $131.5 million in the third quarter, a 133% increase that outpaced the industry’s 28% average growth. Galaxy launched a curated vault on Morpho on July 16 for Fireblocks’ 2,400 institutional clients. Keyrock also manages a dedicated vault on Morpho.
Hare is taking a different route by focusing on the Aave ecosystem, underwriting the underlying assets it originates and using Turtle to tie each deposit to a specific distribution channel. Market concentration is also easing. Steakhouse, Sentora and Gauntlet controlled a combined 74.7% of deposits as of June 30, but captured 64% of new money in the third quarter.
Figure 2 ranks third-quarter net deposit gathering after interest. Sentora led with $461 million, followed by Steakhouse at $347 million, K3 Capital at $181 million, Hyperithm at $148 million, RockawayX at $138 million and Wintermute’s Armitage at $74 million.
Aave is opening the door to external curators
Aave is moving toward a modular curation model similar to Morpho’s. In early October, Aave DAO approved an external curator Hub-Spoke framework proposal led by Sentora. The structure allows independent management of collateral selection, risk parameters, interest-rate curves and oracle settings on Aave V4.
That setup bypasses the older, slower review path handled by internal DAO risk service providers. On Aave, curator credibility is becoming more directly tied to independent underwriting skill. That is the slot Hare is targeting.
Hare CEO Connor Milner described the firm’s work as underwriting four layers of risk: market risk, asset risk, smart contract risk and counterparty risk. Hare helps issuers bring assets onchain, structure them for DeFi use and place them with allocators.
Two-track vault design: dollars for scale, gold for leasing income
USD Earn aggregates major dollar stablecoins into one pool and adds a fixed-rate option. The stated goal is to reduce the yield dilution that tends to appear as vault deposits scale up. Gold Earn is built for PAXG and PAXGy, with Paxos Labs serving as a core strategic partner.
PAXGy is central to Hare’s underwriting case. Paxos Labs launched the asset on Sept. 24. It leases the physical gold behind the token to refiners, jewelers, miners and bullion market-making banks, earns commercial rent and adds that income to PAXGy’s redemption value.
That structure also leaves holders exposed to the credit risk of the gold lessees, and redemptions go through a queue with review thresholds. Hare’s tiered liquidity design is meant to price both lessee credit risk and exit liquidity.
Over the past year, PAXG supply rose 45% to about 435,000 troy ounces, while gold prices increased 3% over the same period. The report identifies that growing base of gold holders as the core audience for Gold Earn.
The xUSD collapse showed the limits of onchain transparency
Vault code can record positions faithfully. It cannot read the borrower. Curators can make every onchain rule transparent, but code still cannot determine whether the issuer behind a collateral token is solvent.
On Nov. 4, 2025, Stream Finance suspended withdrawals after its external fund manager disclosed losses of as much as $93 million. xUSD lost its peg within hours. Curated lending markets on Morpho and Euler that accepted xUSD as collateral were hit as a result. The smart contracts themselves did not fail, but the bad debt ultimately landed on depositors inside the vaults.
The failure happened at the fund-manager layer, outside the scope of the smart contracts that curators had previously audited. Hare says it is trying to underwrite through that gray zone. For each curated vault, the firm models liquidity stress and lays out an exit timetable for allocators: what can be withdrawn immediately, what arrives after delays such as T+7, and what may take longer to recover.
GSR supplies capital while Turtle handles distribution
Milner said DeFi lending is developing a business model that looks closer to traditional investment banking. GSR has been active in crypto market making since 2013. In March this year, it spent $57 million to acquire consulting firms Autonomous and Architech as part of a push to become a one-stop capital markets partner in crypto. Earlier, in October 2025, GSR also reached an agreement to acquire a U.S. broker-dealer regulated by FINRA.
Hare adds a credit business line to that broader buildout. The report says the platform comes with a network of more than 110 institutional counterparties.
Turtle, the distribution partner, reaches self-custody wallets, centralized exchanges and digital neobanks. Each deposit entering a vault is tagged with a unique distributor ID. As long as the funds remain in the vault, the distributor continues to earn a revenue share, while the vault protocol that originates the asset pays channel fees for those net new deposits.
The report also says Aave is working closely with GSR on vault construction and curation mechanics, Chainlink is providing dedicated data feeds and oracle pricing, and Hypernative is handling around-the-clock security monitoring.
Curator economics remain thin as fee competition builds
Curators make money by taking a small cut of vault yield. In the third quarter of 2026, curated vaults generated $56.9 million in interest income for depositors and curators combined. Curators kept $3.9 million of that amount, implying a blended take rate of 6.8%, slightly below 7.0% in the second quarter.
Figure 3 breaks down every $100 of interest income. Across the sector, depositors received $93.17 and curators took $6.83. Sentora’s share reached $11.73, while Gauntlet took only $1.19.
At a 6.8% average take rate and a 2.9% blended annualized vault yield in the third quarter, a curator managing $100 million would earn about $200,000 a year. At $1 billion, annual revenue would be about $2 million. If blended annualized yield rose to 5%, curator revenue on a $1 billion vault would increase to $3.4 million. If the take rate rose to 20%, annual revenue would reach $5.8 million.
Milner contrasted Hare with two other curator models in the market. One resembles a hedge fund chasing performance fees. The other focuses on deploying stablecoins to collect token subsidies and liquidity incentives. Hare puts asset origination and underwriting at the center. In that value chain, the asset issuer pays listing and distribution costs because Turtle charges the protocols that receive deposits.
The report argues that once Hare formally publishes its tiered liquidity framework, it could set a new transparency benchmark for institutional DeFi allocation that other curators can be measured against. The commercial credit of PAXGy lessees is presented as the first live test case for that system.
The closing argument is that curated vaults have already solved the first-stage problem of onchain custody and position transparency. Infrastructure such as Hare is now trying to reprice the deeper credit embedded in wrapped assets. GSR’s $100 million commitment is meant to provide the first layer of risk capital inside the vaults, while Turtle’s distribution network connects those products with allocators globally.
