kpk has launched agent-powered vaults on Morpho, positioning the product as a non-custodial way to automate onchain asset management with transparent policy execution. By building on Morpho, kpk said the vaults can tap into the network’s $10 billion-plus scale and its integrations with major fintech companies and banks to run managed yield strategies autonomously.
Execution is rule-based, and kpk says the agents are not AI
The vaults use agents to manage liquidity, optimize performance, and adjust exposure under changing market conditions according to predefined onchain policies. kpk said the setup runs on the same non-custodial infrastructure that has supported large onchain treasuries including Gnosis and ENS since 2020.
At the center of the structure is kpk’s onchain policy layer, which sets the parameters, permissions, and safeguards for asset management. Agents operate inside verifiable limits and carry out predefined actions without discretion. The company drew a clear line on terminology: these agents are not AI systems, but logic-based programs with limited and auditable permissions, designed to keep activity transparent and non-custodial.
Initial vault lineup spans USDC, EURC, ETH, and Arbitrum
The first batch of vaults introduces diversified strategies across stablecoins and ETH. kpk described them as fully automated, low-risk vaults intended for continuous operation. Allocations are rebalanced in real time across liquid markets, while collateral filters and exposure caps are used to preserve withdrawal access and reduce risk.
The published lineup includes a USDC vault allocating across blue-chip collateral markets tied to wstETH, BTC, and ETH+; an EURC strategy with tier-based lending exposure limits; an ETH vault designed to earn lending yield while maintaining real-time liquidity through automated rebalancing; and an Arbitrum version that applies the same policy and automation framework across incentive-rich Layer 2 markets. All vaults are ERC-4626 compliant, with parameters, oracles, and allocations visible through the kpk handbook and Morpho interface.
Soft launch stress test moved 20% of liquidity in seconds
kpk said a soft launch incident briefly pushed EURC markets above their utilization threshold, creating a liquidity crunch. In response, an agent reallocated 20% of the vault’s liquidity within seconds, preserving full withdrawal access. The company contrasted that with manually managed vaults, which it said took hours to react.
According to kpk, the vault maintained higher net yields and uninterrupted liquidity through that period. In testing, weekly realized yields outperformed identical benchmarks by as much as 46%. The company framed automation here as operational discipline: policy is embedded directly into execution, so allocation, risk control, and reporting happen onchain rather than through manual processes.
kpk, formerly known as karpatkey, is an onchain asset manager that has managed treasuries for major DeFi protocols. The company also noted that the vaults are experimental non-custodial smart contracts and may involve significant risks, including the possible loss of all assets, and said the material does not constitute investment, legal, or financial advice.