Yearn (YFI)

I see the word vaults thrown around a lot lately.

Just to be clear, by vaults do yall mean yield aggregators like Yearn?

If so, I too am very bullish.

Stablecoins transformed money, tokenization reshaped ownership, and onchain vaults could be crypto's next major evolution.

Already managing nearly $7B in assets, they are quietly becoming the foundation for onchain asset management.

Let's unpack why this matters.

—
Evolution of DeFi Vaults
Vaults are onchain asset managers that automatically allocate capital across yield-generating strategies.

● Generation 1 (2020-2022): Yield Aggregation
Vaults automated yield farming by routing capital across DeFi protocols for the highest APY, but rigid strategies and poor composability limited growth.
Projects:
• @yearnfi
• @beefyfinance
• @harvest

The Turning Point: ERC-4626
ERC-4626 standardized vaults, making deposits, withdrawals, accounting, and vault shares interoperable across DeFi. ERC-7540 later extended support to RWAs and private credit.

● Generation 2 (2023-2025): Curated Vaults
Infrastructure separated from risk management, letting curators manage allocations while protocols remained permissionless and non-custodial.

Projects:
• @Morpho Blue + MetaMorpho
• @eulerfinance V2 Vault Kit

Curators:
• @gauntlet_xyz
• @SteakhouseFi

● Generation 3 (Today): Onchain Asset Management
Vaults evolved beyond yield optimization into onchain asset management infrastructure spanning lending, RWAs, treasuries, private credit, and multi-chain portfolios.

Examples:
• Institutional wrappers
• Portfolio managers
• Fund-of-funds
• Consumer finance apps

Distribution:
• @coinbase
• @krakenfx
• @RobinhoodApp

—
● DeFi Vault V/S CLOs
Vaults mirror CLOs but replace financial intermediaries with transparent, onchain execution.

DeFi Vault
• Onchain assets managed by curators
• Smart contracts replace trustees and custodians
• Transparent, blockchain-native settlement

CLO
• Senior secured corporate loans managed by asset managers
• Trustees and custodians oversee assets
• Traditional financial infrastructure and settlement

—
● Vault Ecosystem Stack
Vaults rely on a layered ecosystem where infrastructure, curators, and distribution each play a distinct role.

Base Infrastructure: Provides the rails for vault creation and execution.
• @Morpho
• @eulerfinance
• @centrifuge
• @veda_labs
• @sparkfinance
• @kamino

Curators: Allocate capital and manage risk across vaults.
• @SteakhouseFi
• @SentoraHQ
• @gauntlet_xyz
• @yearnfi
• @chaoslabs
• @Bitwise
• @hyperithm
• K3 Capital

Distribution: Brings vaults to mainstream users through consumer platforms.
• @coinbase
• @krakenfx
• @RobinhoodApp

—
At ~$7B AUM today versus a $1.5T CLO market, onchain vaults are still in the earliest stage of adoption.

Institutional adoption, RWAs, tokenized credit, and multi-chain expansion could push managed vaults toward a projected $40B-$65B market.

Vaults aren't just another DeFi primitive. They're building the foundation for crypto's next asset management layer.

Read @Grayscale's report on onchain vaults:

https://t.co/TWuSg5SHEj

JUST IN: Yearn vesting escrow 0.4 deployed on Ethereum with ERC-4626 vault vesting, 792 prior deployments processed $37M.