Deposits in crypto lending vaults have passed $10 billion, up from about $4 billion at the start of 2025, according to the Financial Times, as relayed by CoinDesk on 19 October.
The vaults run on DeFi smart contracts, with a curator acting like a fund manager. The curator picks lending strategies, sets risk limits and takes fees. The main depositors are fintech firms, digital asset treasury companies and hedge funds.
Typical returns run from 3 percent to 10 percent, with riskier strategies reaching 20 percent or more. The loans behind them can be secured on illiquid tokens, crypto-backed stablecoins or tokenised private credit.
That is where the risk sits. If collateral falls and cannot be sold, depositors take the hit, and automatic liquidations can push markets lower. Hacks, coding errors and flawed price feeds add to it.
The newest entrant shows the cautious end of the range. Two Prime’s Pareto bitcoin vault, launched in September, targets 1.5 to 2 percent a year, takes wrapped bitcoin, and has about $10 million of the lender’s own capital set aside to absorb first losses.
Regulators have noticed. The SEC has asked whether vaults holding securities fall under its rules, and European regulators have proposed oversight of intermediaries that give access to DeFi.
Neither has produced an outcome. The $10 billion is one newspaper’s figure with no stated method, there is no count of how much each curator manages, and the coverage reports no realised losses.
