On-Chain Asset Management Is Booming; Here's Where People Are Investing

Core Insights - Keyrock reports a significant increase in assets under management (AUM) in the onchain asset management sector, estimating a surge of 118% in 2025 to reach $35 billion, with potential growth to $64 billion or $85 billion by 2026 depending on market momentum [1][2] Group 1: Market Performance - Discretionary strategies have shown exceptional growth, increasing by 738% year-to-date, indicating a shift towards onchain investing as a viable alternative to traditional finance [2] - The report identifies three leading protocols—Morpho, Pendle, and Maple—that collectively control 31% of the industry's AUM, highlighting both leadership in scaling and concentration risk [2] - Yield vaults are the primary entry point for investors, holding $18 billion in deposits, demonstrating their popularity among allocators [2] Group 2: Liquidity and Returns - While smaller wallets are numerous, larger investors (whales and dolphins) contribute 70%–99% of capital across various strategies, emphasizing their importance in providing liquidity [3] - The performance of onchain investments has matured, with net returns now competitive with traditional markets, although not consistently higher; automated yield vaults outperformed traditional finance peers by approximately 186 basis points after fees [3] - Discretionary strategies have delivered results akin to hedge funds, offering additional benefits of liquidity and transparency [4] Group 3: Strategic Expansion - Keyrock has expanded its operations into asset and wealth management through the acquisition of Turing Capital, a Luxembourg-registered fund manager, indicating a strategic move to enhance its service offerings [4][5]