Bitwise launches USDC-based on-chain lending product, expanding DeFi yield strategies
Summary
- Bitwise said it has expanded its on-chain yield strategy by launching an on-chain DeFi lending product using USDC.
- The product targets up to 6% annual yield through an overcollateralized lending structure based on Morpho, and said it reduced liquidation and counterparty risk.
- The outlet said that as Bitwise expands from passive products into active on-chain yield strategies, demand is rising for stablecoin-based dollar yields and for institutional investors seeking to minimize smart-contract risk.
Digital asset (cryptocurrency) manager Bitwise is widening its footprint into decentralized finance (DeFi) by launching an on-chain yield product that uses the dollar-pegged stablecoin USDC.
According to crypto media outlet CoinDesk on the 27th, Bitwise unveiled a USDC yield vault based on an overcollateralized lending structure. The product is built on the DeFi lending protocol Morpho and targets yields of up to 6% per year. Loans are structured so that collateral value exceeds the loan amount, which the firm said reduces liquidation and counterparty risk.
Unlike existing DeFi yield products that rely entirely on automated strategies, Bitwise said it directly controls the full investment strategy and risk management for this product. The asset manager oversees portfolio construction, risk limits and key parameter adjustments, combining traditional finance risk-management practices with on-chain infrastructure.
The launch is seen as significant in that Bitwise, previously focused on passive products, is expanding into active on-chain yield strategies.
The outlet reported that demand is growing for stablecoin-based dollar yields, and that institutional investors are paying attention to alternatives that can pursue on-chain returns while minimizing smart-contract risk.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
