Author: Castle Labs

Compiled by: Jia Huan, ChainCatcher

This article is excerpted from our research on "financial treasuryization".

Download the full report here.

Vault Classification

This section of the report provides a quantitative analysis of the vault landscape to offer a comprehensive picture of the sector and its evolution. We analyze the ecosystem by category, tracking the TVL shifts among different vaults and curators.

We segmented the concentration of curators and provided an outlook on major funding flows, placing the structural shifts that define this year’s treasury within a specific context.

Vaults should not be viewed as a single, all-encompassing market, but rather evaluated according to their different implementation methods, each with different parameters, risk vectors, and responses to stress tests. Aggregated data only provides a partial picture; a more detailed analytical perspective is urgently needed.

Before we begin our analysis, it is important to define the term "vault" as the foundation of our methodology.

Our definition is based on the deployment path. Vault is categorized as a " tool for users to acquire active interest-bearing strategies ." Any asset that is purely an off-chain tool packaged in our analysis is excluded.

• Maple's syrupUSDC meets the Vault standard: users deposit stablecoins into the protocol, which then lends them to institutional borrowers and accumulates annualized returns through credit activities involving the issuance of tokens.
• Lido stETH is a vault: users deposit ETH, and the protocol earns staking rewards, which are distributed through rebase tokens. Centrifuge JAAA is a vault: users earn AAA-rated CLO rewards through a tokenized wrapper that generates returns through their credit positions.
• BlackRock's BUIDL, by this definition, does not belong to a vault: it is a direct token issuance representing a 1:1 claim on an off-chain U.S. Treasury fund.

We applied this perspective to define eight structural categories: lending vaults, liquid collateral, recollateralized collateral, risk curation vaults, vault infrastructure providers, yield optimizer RWA credit vaults, perpetual contract LP vaults, and options vaults.

For the purposes of this analysis, we treat risk curation vaults as a separate category to better understand their dynamics and growth.

Before we delve into each of these categories, let’s first take a look at the overall performance of the vault.

Current ecological status of the vault

Net TVL across all defined vault categories totaled $120.4 billion, down about 50% from the peak of $241 billion around October last year. The downward trend following the October peak was driven by the "October liquidation event," which triggered a cascading liquidation across DeFi.

Due to overlap, the Vault TVL figure is higher than the current DeFi TVL (approximately $86 billion). For example, liquidity staking protocols like @LidoFinance have issued stETH, a rebase asset representing the yield of staked ETH, which is used as collateral in lending protocols such as @Aave and @Morpho.

If we move to a category-level analysis, the overall picture changes dramatically. Recent events have led to a TVL outflow and prompted a broader reality test across the industry regarding safety and risk management (and hopefully a shift towards a safety-first approach).

Categories such as lending, liquid staking, and restaking were hit the hardest because they have the largest exposure to on-chain assets and drive the on-chain economy; while RWA Vault, having no exposure to crypto assets, continued to show unrelated growth.

Categories such as options vaults peaked in April 2022 and have struggled ever since. Risk curator-led vaults suffered a similar blow to other major categories due to the "October liquidation event." Their TVL peaked around the end of October and subsequently declined following the collapse of Stream Finance.

The three incidents between October 2025 and May 2026 (the Stream Finance, Resolv, and Kelp hacks) provide a good stress test window, as these crashes/exploitations have a cascading effect on the entire DeFi ecosystem.

In the chart below, we highlight the historical TVL (TVL) records for these categories during this specific period. As mentioned earlier, most performed poorly, with only the RWA Treasury showing a 37.8% increase over the same period, while the other categories experienced significant pullbacks.

Next, we will continue to analyze the growth of each vault category, focusing on recent trends and changes.

Loan Vault

Lending is the largest vault category, accounting for the vast majority of DeFi TVL. Last year marked a broad shift towards curated vaults, driven by products like Morpho, which helped amplify this trend.

On Morpho , curators can create their own vaults that can have exposure to multiple markets and generate returns for depositors. These vaults can ultimately be curated by any provider, including traditional financial institutions.

Morpho's recent Vaults V2 upgrade provides curators with more features, including the ability to embed approved adapters to generate revenue from multiple sources, granular risk controls (such as setting absolute or relative caps on vault exposure), built-in KYC controls, and other features.

Against this backdrop, Aave also launched its V4 version, introducing the architecture of Spokes (the spokes market) and a unified liquidity hub. Spokes offers enhanced functionality through customizable risk parameters, segregated collateral types, and oracle configurations for each market.

Unlike Morpho's curator-led model, Aave's governance still requires review and approval of the implementation of these Spokes, while Morpho is permissionless. This represents Aave's shift from monolithic lending to modular lending.

The curator model enabled Morpho to accumulate over $7.5 billion in TVL on the Ethereum mainnet and Base. Base contributed significantly to Morpho's growth, increasing from $604 million to over $2.8 billion.

This demonstrates the power of distribution partnerships that Morpho has been pursuing, such as its collaboration with Coinbase: currently, about 40% of the TVL in USD terms is cbBTC, while it has helped facilitate over $1 billion in loans for Coinbase users.

In response to the curator model finding product-market fit (PMF) among institutional investors, Aave is competing in the institutional arena with Horizon, which has accumulated over $350 million in TVL since its launch.

In addition, Aave has undergone many changes in the past few months, including the departure of service providers such as BGD and ACI from Aave Labs, and the announcement and approval of the "Aave will Win" framework, which distributes all revenue from Aave's various products to token holders.

These events did not have much direct impact on Aave users. The only impact was on the price performance of the Aave token, but the recent KelpDAO attack changed the situation: Aave lost more than $12 billion in TVL, bringing it closer to its competitor Morpho in terms of TVL.

The ratio of Aave TVL to Morpho TVL used to be between 5 and 6, but due to this event, it has now dropped to below 2.

@sparkdotfi is part of the Sky ecosystem and is one of the lending protocols that benefited the most from the inflow of funds following the rsETH hack.

The following diagram illustrates the TVL changes for this protocol:

Most notably, Bitcoin supply nearly tripled, stablecoin lending increased by 78% to $752 million with utilization remaining within manageable limits, and WETH lending increased by 44.1% to 325,000 WETH.

@ 0xfluid's unified liquidity layer also introduces a different liquidity design approach, where lending, borrowing, and DEX share the same funds. User collateral acts as LPs (Liquidity Providers) in Fluid DEX, earning transaction fees, while borrowed funds are deployed as smart debt to DEX pools, earning fees to offset borrowing interest costs.

Another interesting move by Fluid is its partnerships with protocols such as @JupiterExchange and @VenusProtocol, through which it has launched white-label products such as JupLend (Solana) and Venus Flux (BSC), with TVLs currently reaching $926 million and $21 million, respectively.

This stems from Fluid's broader positioning of partnering with key players across various chains to gain more market share, with these players sharing the fees with Fluid.

It's worth mentioning @kamino Vault, the main lending stack on Solana with over $1.6 billion in TVL. The protocol has achieved significant growth through its K-Lend model (the Morpho equivalent on Solana). This has enabled Kamino to collaborate with established curators like Gauntlet and target institutional integration.

The largest vault on the platform is currently @SentoraHQ PYUSD, with a TVL of over $219 million, while the second largest is RockawayX's RWA USDC vault, with only $33 million, indicating that Kamino and Solana as a whole still have significant room for growth.

Liquidity Pledge and Re-pledge

Liquidity pledges and re-pledges account for a large share of Vault TVL, at $42.4 billion and $20.6 billion, respectively.

The major participants in liquidity staking are Lido ($21.8 billion), Binance Staked ETH ($8.9 billion), @Rocket_Pool ($1.2 billion), and @Coinbase cbETH ($320 million).

Over time, Lido has maintained its dominance, with its issued asset, stETH, offering high composability across DeFi. However, Lido's dominance also carries concentration risk. They expanded their product line by introducing Earn, an aggregation layer that allows users to deposit funds across DeFi to earn yield. However, this product was impacted by its exposure to $rsETH following the recent Kelp DAO hack.

Binance Staked ETH has grown by 121.8% since last year, leveraging Binance's user base.

For other protocols and the category as a whole, growth has been slow, at the cost of diluted collateral yields, which are currently around 2.5%.

On the other hand, restaking and liquid restaking have emerged as a category to increase the yield earned from liquid staking.

@KelpDAO, a liquidity restaking protocol, has been hacked and its broader DeFi cascade collapses have highlighted the composability risks associated with these assets, which are accepted as collateral throughout DeFi. In this case, it was more of a vulnerability than a feature.

The major participants in restaking and liquid restaking are @EigenCloud ($7.8 billion), @ether_fi ($5.7 billion), Kelp DAO ($1.6 billion), and Renzo ($167 million).

Restaking products such as EigenCloud and EtherFi have expanded over time to include more services.

EigenCloud’s rebranding in 2025 helped it position itself as the AWS of the crypto world, driving the development of verifiable computing.

EigenDA is Eigen's data availability layer, used by multiple L2 servers, including @megaeth, @Mantle_Official, and @Celo. Over 1.8 TB of data has been published on EigenDA, generating a total cost of approximately $90,000.

EigenCloud's TVL, denominated in ETH, has remained stable for a long time, but recently declined following the Kelp hack as users tend to withdraw funds during periods of uncertainty.

Similarly, EtherFi has expanded into a new type of bank (neobank), with thousands of active cardholders who have spent approximately $440 million through its products.

In addition, they have a Liquid product (don't forget EtherFi was originally launched as a liquidity staking protocol), supporting various strategies to enhance yields across DeFi. One of their top ETH yield treasuries has a TVL of $177.5 million.

Risk Curation Vault

Risk curated vaults are one of the fastest-growing categories, reflecting the shift from individual lending to modular lending. These vaults, offered on platforms like Morpho, earn performance and management fees, similar to traditional financial funds, deploying user capital across various strategies to generate returns.

The category currently has a TVL of approximately $6.5 billion, with 75% held by three curators: Sentora ($1.85 billion), @SteakhouseFi ($1.63 billion), and @gauntlet_xyz ($1.5 billion), indicating relatively little competition in the category.

These venture curators charge lower fees than traditional financial hedge funds and venture capital funds, which typically charge management fees (approximately 1-2% of total AUM) and performance fees (approximately 10-20% of earned interest). For example, Steakhouse Financial, the largest curator by revenue, generates $3 million in annualized revenue on $2.13 billion in AUM (an annualized fee rate of approximately 0.14% of total AUM).

These curators typically charge only performance fees, and in some cases, administrative fees, but these are currently much lower. This is a result of the competitive landscape, as curators compete to offer the lowest fees to attract the most TVL (TVL).

Nevertheless, risk curators are concentrated at the top, with the dominance divided among three providers, which is better than liquidity staking, where Lido is far ahead.

Furthermore, what does this concentration mean? The Steakhouse team stated, "Concentration may follow a power law found in traditional asset management analogues such as ETFs, where most of the AUM is concentrated around the leading managers."

This is not necessarily a bad thing; rather, it reflects the compounding effect of scale and trust concentrating on top managers, who compete in terms of performance, product range, and fee load.

The advantage of DeFi is that the arena is open. Anyone can come in and compete. We expect top-level concentration to persist, while there will be healthy competition and space for specialization at the edges.

Following the Stream Finance incident, the concentration dynamics have recently shifted. Prior to that, MEV Capital and Re7 were also highly representative, peaking at $1.49 billion and $830 million respectively. They later shrank, and Sentora emerged as the second-largest curator.

Furthermore, the impact on risk curators following the KelpDAO hack was evident, but a few winners, such as @kpk_io (+159.6%) and Gauntlet (+42.7%), saw net positive inflows.

For KPK, this growth stems from their recently launched Morpho V2 vault, which has attracted deposits from ensdomains, CoWSwap, NexusMutual, and others.

They improved their risk management by integrating agent-driven automation for rebalancing and vault exits. For Gauntlet, growth came from the expansion of its BSC chain and its partnership with the Lista DAO lending protocol, which attracted new inflows of funds.

As Juan Pellicer of Sentora points out, "DeFi insurance is also becoming a real part of the institutional landscape. The ability to provide economic insurance is changing how treasuries or asset managers calculate things; they have to account to investment committees that this is a structural unlocking."

Multi-strategy vault

Yield optimizers, as a category, are maturing and seeing a large influx of new participants. With the increasing number of on-chain yield sources, optimization or aggregation models will become better vault models, providing depositors with the best overall returns.

Protocols like @Veda_labs ($1 billion), @upshift_fi ($380 million), and Fluid Lite Vault ($164 million) lead the overall category.

Each protocol offers a different model, but the goal remains the same: to seamlessly integrate a vault of optimized yields and provide its depositors with the best available yields across DeFi. Due to ongoing market pullbacks and a period of stress since last October, they are currently well below their peak levels.

It's best to view providers like Veda and Upshift not just as aggregators, but as infrastructure for creating segregated yield products. Upshift uses its own policy engine to enforce vault authorization rules and ensure self-custody properties by restricting deployments to whitelisted chains/protocols/tokens/smart contract calls.

Furthermore, Upshift is better categorized as a multi-strategy vault because its vault provides exposure to the entire DeFi strategy, including lending, basis trading, carry trade, liquidity provision (LPing), RWA, and more.

Veda utilizes a modular architecture, separating operations into a "boring" vault whose sole purpose is to hold assets, while any specialized tasks are performed by external modules. The protocol uses Merkle trees to enforce permissions by whitelisting specific vault operations.

Infrastructure providers enable institutions to start with a single integration, assign to a lending protocol, and add more sophisticated strategies as the product offerings expand to achieve higher yields and deeper liquidity.

Other products, such as Fusion ($30 million) from @ipor_io and GearboxProtocol ($29 million), also serve as yield optimization layers. For example, Fusion's primary goal is on-chain vault infrastructure, enabling independent entities such as curators and asset managers to build and operate yield strategies such as leveraged revolving loans and carry trades.

Each Fusion vault is unique in its curation, strategy, and allocation. Automated construction at the strategy level includes different triggers for optimization, leverage maintenance, liquidation risk management, routing, and more.

For example, it allows for swapping when negative spreads occur, using flash loans to migrate leveraged positions across markets, or exiting in the event of a risk event. As the Fusion team noted, "This automation was crucial during the recent rsETH/Aave crisis, when the IPOR DAO stETH circulating vault on the mainnet was one of the first vaults to completely cut off exposure to Aave v3 core."

Overall, automation and execution enable curators to manage risks quickly when the most rapid action is needed.

Of all the funds managed by the agreements, leveraged revolving loans are the largest, at approximately $80 million. This figure is higher because TVL is an insufficient metric for yield optimizers.

Instead, these providers should be analyzed based on their assets under management (AUM), because they allocate funds to other agreements, so their TVL does not reflect their true growth.

Gearbox has introduced a vault architecture for both passive lenders and active borrowers.

At its core, the protocol provides access to leveraged or Delta-neutral exposure for liquidity mining or liquidity provision strategies. While most vault mechanisms are built around curator asset management, Gearbox focuses on the lender's risk management infrastructure.

Borrowers can open credit accounts to interact with external protocols from Gearbox while funds remain in a non-custodial state. V3 introduces a policy-level firewall to protect protocols in the event of a credit account or policy failure.

In the event of an incident, they are unable to drain funds beyond the shared liquidity pool allocated to them, thus protecting passive lenders from contagion.

Recently, the agreement also announced a focus on the RWA revolving loan vault.

RWA Vault

RWA Vaults have achieved sustained growth over the past 5 years, with a compound annual growth rate (CAGR) of 231.3%, reflecting the growing interest of retail and institutional investors in RWA yield exposure. Even after the recent @ResolvLabs and Kelp exploits, the RWA Vault category has remained sticky and has not experienced significant volatility due to its limited exposure to on-chain assets.

The largest players in this category are @maplefinance ($2.1 billion), @centrifuge ($1.6 billion), @anemoycapital ($1.1 billion), @re ($263 million), and others.

Maple Finance has experienced rapid growth over the past year, with its TVL climbing nearly 10 times since the beginning of 2025. This growth can be attributed to a variety of factors, including the launch of Syrup, as part of the protocol's transition from a purely institutional model.

This launch opens the door for products targeting retail traffic, such as syrupUSDC and syrupUSDT, which are highly composable in DeFi. DeFi's composability and deep liquidity enable assets to be leveraged through revolving lending protocols and integrated with products like @pendle_fi, thus fostering a growth flywheel.

Reflecting product demand, the platform currently has approximately $1.7 billion in active loans. These loans are dominated by USDC, accounting for about 75% of total active loans, followed by USDT, which makes up the remainder.

Other products have also witnessed significant growth. For example, Centrifuge positions itself as a private credit infrastructure protocol. Its partnership with Anemoy resulted in an $1.1 billion pool of Treasury bonds running on Centrifuge's infrastructure. Centrifuge was also recently selected by Coinbase as its tokenization partner.

Products like Re bring reinsurance coverage risks onto the blockchain, giving users broader access to real-world returns. In addition, the Upshift USDC vault provides loans to over-collateralized institutional funds, giving their depositors exposure to institutional lending.

Despite witnessing all the growth in DeFi, RWA still represents only a small fraction of the on-chain tokenized value. Currently, active RWA DeFi TVL accounts for approximately 1/10 of the total RWA value.

The significant difference between these two values ​​is because these assets belong to different categories, going beyond the general considerations for ordinary assets, as they involve redemption periods, compliance, and liquidity issues in some cases.

For any asset to scale in DeFi, active redemption and secondary liquidity are required, as users may need to sell these assets to regain liquidity, or in the case of lending protocols, liquidators repay loans and sell assets close to the token price to make a profit. However, given all the restrictions imposed by RWA, these are mostly made more difficult to achieve.

In addition, another important part of the growth flywheel of interest-bearing assets like RWA is the revolving loan.

RWA revolving loans borrow stablecoins against tokenized Treasury bonds and repeatedly redeploy them into the yield treasury. With a base Treasury yield of 4-5%, and leverage of 2-3x, returns of 7-12% can be generated, but this is only achievable if borrowing costs remain low (around 1%).

On-chain stablecoin interest rates are highly volatile and can significantly compress this spread. The leverage used to execute such transactions amplifies liquidation and oracle risks, and the strategy relies on the stability of the RWA collateral value. Consequently, some RWAs settle on T+1, while others settle on T+5, and redemption issues also come into play.

To solve this problem, there are several solutions:

• ERC-7540: Introduces asynchronous ERC-4626 vaults, allowing users to use their redemption claims as liquidity while the underlying assets are settled off-chain. Centrifuge is one of the most prominent examples of ERC-7540 in a production environment, bridging the tension between DeFi and traditional financial T+ settlements by using synchronous deposits and asynchronous redemptions. These hybrid vaults are becoming the template for any vault involving off-chain assets.
• Securitize Vault Registrar: This ERC maps each investor to their identity when using RWA in DeFi, ensuring the protocol complies with all regulations and requirements necessary for the asset.
• Redstone liquidation streams : They perform RWA liquidation by introducing auction-based liquidation and connecting positions to KYC-verified solvers that receive the underlying assets off-chain and close positions on-chain.
• Upshift Clear: Upshift is launching its new product with Superstate to enable instant RWA redemption, allowing users to exchange their RWA for USDC at the currently reported price, with a redemption fee of 5 basis points.

Another protocol in this category is 3F , a platform that leverages RWA on-chain (@3f_xyz). It currently has $7 million in TVL and addresses RWA asset issues in DeFi in a way that differs from other solutions.

It attempts to externalize different factors, including bridge facilitators and liquidity integrators. The former provides upfront liquidity to complete the exposure that users intend to take on their underlying capital.

For example, if a user's target exposure is $3 million and their deposit is $1 million, they can obtain the remaining $2 million in liquidity from the bridging facilitator, thus leveraging the entire position 3x.

Similarly, when a user intends to close their position, the facilitator provides the necessary liquidity to resolve redemption delays. The latter, liquidity aggregator, provides immediate liquidity when a user wants to exit immediately.

Even with bridging facilitators, users still have $1 million in deposits that must go through the entire redemption process, and these integrators provide much-needed liquidity.

Both methods borrow efficiency from the market, much like the clearing process in lending, with active on-chain participants filling the gaps needed in RWA revolving loans to generate profits.

Over time, such a system becomes easier to scale because every participant benefits from the process: recirculators get a smooth exit, while facilitators earn profits by providing liquidity and offering users faster redemptions.

As mentioned in the previous section, Gearbox also plans to launch "Retokenisation": a feature that allows infrastructure to natively support leveraged minting and redemption of non-atomic tokenized assets without requiring secondary liquidity or incurring redemption delays.

In practice, Gearbox's contracts will be integrated with RWA issuer contracts to create a seamless, composable system that enables RWA leverage directly at the issuer level, making Gearbox the only EVM protocol to offer native RWA leverage.

Perpetual Contract LP Vault

Representative perpetual contract LP treasuries include Jupiter Perps ($715 million), @HyperliquidX HLP ($396 million), @DriftProtocol ($256 million, down after recent hack), @GMX_IO ($242 million), and @Ostium ($51 million).

Jupiter's JLP remains the largest perpetual vault in terms of TVL, but has lost more than half of its value since last October due to liquidation events.

HLP performed better in terms of value preservation, declining 30% from its peak of $600 million last September. Hyperliquid's vaults have experienced constant fluctuations, typically driven by the floating yield of its HLPs, which is affected by its structure and market conditions. Thus, periods of high yields attract capital, while periods of low yields or losses drive it away.

In March 2025, a major loss occurred when a trader opened a large short position on Jelly tokens, then withdrew the margin, triggering a forced liquidation and prompting HLP to take over the position.

Such losses to the vault created a structural bias among depositors, who typically categorized HLP as a high-risk vault. However, Hyperliquid reduced the leverage allowed for this type of token to avoid such a situation, thus amplifying the losses.

Products like Ostium OLP offer exposure to RWA perpetual contracts and provide their users with yields in different configurations, but their TVL has dropped by about 50% from its peak. This pullback is a result of broader market changes and the Ostium yield cycle.

Furthermore, Ostium recently introduced an architectural change that makes the OLP a priority tier and an intraday settlement layer that never assumes primary risk. This is the opposite of the HLP model: depositors who previously wanted the directional exposure provided by the OLP might have left, but in this new model, it becomes a passive source of income for depositors with reduced risk.

Options Vault

DeFi Options Vaults (DOV) as a category gradually faded over time, peaking in 2022. DOVs offered exposure to strategies such as covered call options and cash-collateralized put options, but lacked capital efficiency, were risky, and attracted a shrinking audience over time as crypto users tended to be drawn to perpetual contracts. However, Options Vaults have recently been improving and solidifying their use cases, at least for more savvy users.

Options vaults no longer exist in the old format. Instead, they have a different architecture, are more user-friendly, and are delivered through products such as @DeriveXYZ and @ryskfinance. Today, options vaults are executed through a Request for Quotation (RFQ) system, with market makers processing the data in the background.

Derive is an options and perpetual contract exchange that has experienced accelerated growth since the launch of V2 in March 2025, thanks to feature expansions such as the use of CLOB and the enabling of institutional-grade features like over-the-counter custody and support for multiple collateral types, handling $12 billion and $16 billion in perpetual contract and options trading volumes, respectively.

Derive V1 has active vaults that provide users with exposure to different strategy options and create Delta-neutral positions for their depositors to maximize annualized returns. These vaults currently hold approximately $2.4 million in TVL.

On the other hand, products like Rysk offer retail investors options exposure through covered call options and cash-backed put options. Launched on Hyperliquid, focusing on covered call options on HYPE, it currently has approximately $56 million in TVL and handles $975 million in notional options trading volume.

In addition, they offer Rysk Premium, a flagship product designed as a vault for savvy allocators, deploying funds across various options strategies and generating consistent returns for depositors.

The new vault implementation focuses on addressing some of the issues that existed with the existing product. These issues included poor strategy design with timeframes as short as 7 days; executing trades at fixed intervals, creating opportunities for front-running; and a customizable design that allowed users to align their size, strike price, or expiration date.

Options vault providers are now more attuned to market trends and understand which assets to list in order to capitalize on new opportunities in interest-bearing assets.