News about MORPHO

Deposits into crypto lending vaults have risen from $4 billion at the start of last year to more than $10 billion, according to the Financial Times. Each vault is run by a 'curator' who selects lending strategies through smart contracts on DeFi platforms, sets risk limits and collects fees, with typical returns of 3% to 10% and riskier strategies reaching 20% or more. Risks include illiquid or hard-to-sell collateral, automatic liquidations, hacks and coding errors, while investors may focus on headline yields. Fintechs, digital asset treasury firms and hedge funds are among the main depositors, and Bitcoin lender Two Prime launched a vault on Pareto targeting 1.5% to 2% yields, with a minimum deposit of 5 WBTC and about $10 million of its own capital absorbing initial losses. U.S. and European regulators are examining whether existing rules should apply, and the SEC has questioned vaults that hold securities.