On-chain capital managed by crypto-native asset managers has grown from 1 billion to over 4 billion, driving innovative development in asset management through deep DeFi integration and capital deployment. Companies like Re7, Gauntlet, and Steakhouse Financial are leading this trend. Since January 2025, the managed on-chain capital has surged, with the Morpho protocol hosting nearly 2 billion of professionally managed capital. Institutional perception of DeFi is shifting; DeFi is being redefined as a flexible and programmable financial layer that complies with regulatory requirements. Many fintech companies and exchanges use DeFi as backend infrastructure to enhance user experience and capital efficiency. Institutions mainly participate in DeFi through three methods: stablecoin yields, crypto yields, and lending. Platforms such as Coinbase and PayPal offer stablecoin yields, and Coinbase also provides crypto-collateralized loans via the Morpho protocol, exemplifying the 'DeFi mullet' model.

DEFI

MORPHO

<p>Crypto-native asset managers are becoming a significant force in decentralized finance. Firms such as Re7, Gauntlet, and Steakhouse Financial are leading the charge.</p><p>Since January 2025, the on-chain capital they manage has surged from $1 billion to more than $4 billion.</p><h2>Crypto Asset Management Evolves</h2><p>According to a joint report by the analytics platform Artemis and DeFi yield platform Vaults, these players are not only deploying capital across diverse opportunities but are also contributing to the evolution of DeFi by implementing risk management practices and advanced allocation strategies, especially within the stablecoin sector.</p><p>The Morpho Protocol now hosts nearly $2 billion of this professionally managed capital as institutional interest in DeFi-native structures rises. Gauntlet commands 31% of this market segment, with Steakhouse Financial following at 27%, Re7 at 23%, and MEV Capital at 15.4%. These statistics indicate an increasingly competitive environment among specialized managers.</p><p>At the same time, institutional views on DeFi are seeing a transformation. Once considered an unregulated frontier, DeFi is now being reimagined as a flexible, programmable financial layer. The development of permissioned DeFi markets on platforms like Euler, Morpho, and Aave represents a conscious shift to meet institutional standards.</p><p>These environments offer controlled access points where institutions can interact with DeFi protocols while satisfying essential compliance requirements, including KYC, AML, and counterparty risk assessments.</p><h2>Institutions Embrace DeFi as Backend Infrastructure</h2><p>The report stated that institutional perspectives on crypto are shifting, especially as US regulation evolves and DeFi platforms mature. DeFi is no longer seen as an unregulated threat but is increasingly viewed as a customizable, integrated financial layer.</p><p>Many fintech firms, crypto wallets, and exchanges are now using DeFi as hidden infrastructure, abstracting its complexities to improve user experience. This approach helps with yield integration, capital efficiency, user retention, and new revenue streams. Institutions primarily engage with DeFi through three avenues: stablecoin yield, crypto yield, and borrowing. These services are embedded in familiar, centralized apps, masking the underlying DeFi mechanisms.</p><p>For example, Coinbase and PayPal offer stablecoin yields via USDC and PYUSD, respectively. On the lending side, platforms like Coinbase offer crypto-backed loans using protocols such as Morpho, exemplifying what the report calls the “DeFi mullet”: a fintech interface powered by a DeFi backend.</p>

On-chain capital of crypto-native asset managers surges to 4 billion USD, driving innovation in DeFi asset management