TradFi is selling crypto income on Wall Street but a hidden switch decides who gets in
Bitwise's February announcement arrived as two moves packaged as one. The crypto asset manager announced a partnership with Morpho to launch curated yield vaults and simultaneously acquired Chorus One's institutional staking business.
It looks like a deliberate assembly: curation mechanisms to filter protocol risk, infrastructure to deliver returns, and enough operational scaffolding to make the whole stack recognizable to allocators who think in basis points rather than memes.
That combination of yield products using DeFi rails wrapped in institutional controls is becoming a category of offerings that yield on tokenized products.
Assets such as tokenized Treasuries, money market funds, and permissioned lending protocols converge into structures that institutions can justify to compliance teams and boards.
BlackRock's BUIDL shares now trade on UniswapX via an allowlist.
VanEck's tokenized Treasury fund serves as collateral inside Aave's institutional lending lane. UBS's tokenized money market fund functions as on-chain collateral through DigiFT and Secured Finance.
These aren't pilot programs designed to generate press releases. They're production integrations in which settlement occurs on-chain, but access, reporting, and counterparty vetting operate as in traditional finance.
The bet embedded in certified yield is straightforward: institutions will use DeFi infrastructure when the product resembles something they already understand. The controls align with their legal and operational frameworks.
What makes the bet interesting is that it's being tested simultaneously across three distinct archetypes, each solving a different friction point in the TradFi-to-DeFi handoff.
When Treasuries become DeFi collateral
The first archetype treats tokenized yield-bearing assets, primarily US Treasuries and money market funds, as raw material for DeFi credit and trading activity.
BlackRock's partnership with Securitize and UniswapX, announced Feb. 11, exemplifies the model. BUIDL, BlackRock's tokenized Treasury fund holding over $2 billion in assets, became tradable through UniswapX's request-for-quote system.
Participants must be allowed through Securitize, and market makers operate within allowlisted boundaries.
The design delivers DeFi's atomic settlement and composability without requiring institutions to interact with anonymous counterparties or rely on pseudonymous governance.
VanEck's integration with Aave Horizon extends the logic.
Aave built Horizon as a permissioned lending market where borrowers and collateral issuers undergo institutional vetting, while the supply side remains open. VanEck's VBILL, a tokenized Treasury product, serves as approved collateral.
The arrangement creates a use case that institutions recognize: secured financing against government debt, executed via smart contracts rather than repo desks.
WisdomTree's Jan. 28 expansion onto Solana adds a distribution angle. The asset manager's tokenized fund suite now operates on a blockchain explicitly chosen for speed and cost, with materials noting that institutional clients can deploy these positions inside DeFi applications.
UBS demonstrates how far the archetype extends. In early February, UBS Asset Management's tokenized money market fund, uMINT, began serving as collateral for Secured Finance, a DeFi protocol accessible through DigiFT's distribution layer.
The structure allows institutions to borrow against tokenized cash equivalents in a non-custodial environment, using traditional secured funding mechanics, settled on-chain with smart contracts enforcing the terms rather than legal agreements and manual reconciliation.
Each example follows a pattern: yield-bearing TradFi assets migrate on-chain, not to be held passively, but to serve as productive collateral or tradable instruments within DeFi's credit and liquidity infrastructure.
Once that migration reaches scale, DeFi stops being an alternative market and becomes a parallel repo and secured-lending venue where Treasuries and money market funds generate spreads on DeFi-native borrowing demand.
Permissioned lanes inside open protocols
The second archetype inverts the problem.
Instead of bringing TradFi assets into DeFi, protocols build institutional-grade lanes inside existing DeFi infrastructure.
Aave Horizon is the clearest expression. Launched in August 2025 and still expanding its partner roster, Horizon segregates borrowers and collateral issuers into a permissioned tier while leaving the supply side open to broader participation.
The initial collateral base included tokenized products from Superstate and Centrifuge, with Circle's USYC among the approved assets. The partner network spans Securitize, VanEck, WisdomTree, and other names institutions already recognize from capital markets.
The architecture answers the core objection institutions raise when evaluating DeFi: counterparty anonymity and governance uncertainty.
Horizon doesn't eliminate those risks, creating instead a walled garden where institutions interact only with vetted participants while still benefiting from DeFi's transparency, programmability, and settlement efficiency.
Sid Powell, CEO of Maple Finance, outlines the strategic rationale for permissioned structures:
“Institutions are not just chasing yield, they are looking for risk-aware structures, transparent mechanics, and operational reliability. Curated vault models help filter protocol risk, standardize exposure, and create clearer expectations around performance and security. That is much closer to how institutional portfolios are built.”
Banks meet DeFi when it looks like secured financing
The third archetype is the rarest but perhaps the most consequential.
Société Générale-Forge's interaction with MakerDAO, approved in August 2022 with drawdowns reported in early 2023, established a precedent: a major regulated bank accessing a DeFi credit protocol under legally structured terms.
SG-Forge described a MakerDAO-approved credit facility using SG-issued security tokens as collateral to borrow DAI. The transaction required legal engineering to make DeFi's pseudonymous governance compatible with a regulated institution's compliance posture, but it proved the concept works.
The significance lies not in the facility's size but in the proof of feasibility.
Regulated institutions will use DeFi credit markets when the transaction can be structured to resemble familiar secured funding arrangements and satisfy legal and operational requirements.
Why certified yield matters now
The timing of certified yield's emergence reflects two concurrent trends.
First, the on-chain representation of risk-free rates has become both observable and investable. RWA.xyz reports a distributed asset value of around $24.92 billion, up 13.86% over 30 days as of Feb. 17.
Tokenized US Treasuries alone account for roughly $10.9 billion of that total, with platforms displaying 7-day APYs that serve as real-time on-chain benchmarks.
DeFi yields are no longer compared against TradFi returns in the abstract, as they're measured against a tokenized T-bill curve with instant settlement.
Second, macro conditions reinforce the income pressure narrative.
Chicago Fed President Austan Goolsbee indicated in mid-February that several rate cuts in 2026 remain possible if inflation trends toward the Fed's 2% target. In easing cycles, allocators prioritize income preservation.
Certified yield products let institutions treat crypto rails as an income sleeve rather than a speculative position.
Powell's observations on client segmentation clarify the adoption curve. According to him:
“Interest is coming from several directions, but family offices and RIAs remain the most active in practice. They typically have more flexibility to explore new structures and move faster on allocations.”
He added that endowments and pensions are increasingly engaged in research and due diligence, especially as yield opportunities begin to resemble familiar fixed-income or alternative-income profiles.
The shift from speculative returns to portfolio construction marks a maturation point. Family offices and RIAs adopt early because they can move without committee approval.
Pensions and endowments enter after governance frameworks catch up and the products demonstrate track records.
Two paths, one destination
The apparent tension between centralized wrappers and direct DeFi integration may prove complementary. Powell sees both paths developing in parallel:
“Over time, the distinction may matter less than the user experience and risk controls delivered to clients. If DeFi integrations can meet institutional standards for transparency, governance, and reliability, partnerships become a natural evolution rather than an exception.”
The convergence is already visible. BlackRock's BUIDL integration with UniswapX combines direct DeFi settlement with institutional access controls.
Aave Horizon creates a permissioned DeFi-native lane. Tokenized money market fund collateral programs condition institutions to accept on-chain collateral mechanics even when the initial transaction happens off-exchange.
Each approach advances the same end state: income delivered on-chain with controls institutions can justify internally.
What institutional allocators are buying isn't exposure to DeFi as a concept. They're buying yield products that happen to settle on-chain, wrapped in the permissions, reporting standards, and risk boundaries they already trust.
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