Grayscale: 3,000+ onchain vaults hold $7B

Grayscale says more than 3,000 onchain vaults collectively hold about $7 billion. The firm’s report states the vaults pool investor capital and deploy it across yield-producing strategies, with rules set by managers known as curators.

The report compares the structures to collateralized loan obligations because both combine funds from multiple investors into managed portfolios that aim to produce risk-adjusted returns. The main difference is infrastructure: onchain vaults use smart contracts to execute allocations and settle transactions instead of custodians, trustees and other intermediaries.

Grayscale identified 57 curators operating the market and found strategies focused on stablecoins account for about 79% of assets. Networks with the largest share of activity include Ethereum, Base and Solana. By contrast, the global CLO market is estimated at about $1.5 trillion across thousands of vehicles managed by more than 250 firms.

The report says smart-contract designs can give investors near real-time visibility into holdings and transactions, reduce administrative frictions in settlement, and allow assets to move without relying on conventional clearing and custody rails.

Zach Pandl, Grayscale’s head of research, wrote that ‘Vaults are a vehicle for onchain asset management’ and that they can offer ‘full transparency, operational efficiencies, and potentially higher liquidity.’

Grayscale identifies regulatory uncertainty in the United States as the main obstacle to broader adoption. Vaults in which curators select strategies, allocate assets or manage risk could draw scrutiny under U.S. securities laws or be subject to investment company and investment adviser rules. The report notes institutions generally require clear custody, compliance and investor-protection standards before committing significant capital.

The firm states the onchain vault market is small compared with traditional structured credit and that wider use will depend on whether vaults can keep smart-contract efficiencies while meeting legal and operational standards expected by institutional investors.