Grayscale: 3,000 Onchain Vaults Holding $7B Could Be Next Big Crypto Product

The market remains small compared with traditional structured credit. Grayscale estimates that more than 3,000 vaults hold about $7 billion in assets. Those products are managed by 57 curators, with stablecoin-focused strategies accounting for 79% of the total.

By contrast, the global CLO market holds roughly $1.5 trillion across thousands of vehicles managed by more than 250 firms.

Vaults could become more important as onchain credit markets mature. They may eventually serve as core investment products for digital assets, much as CLOs and managed credit funds do in conventional markets.

Still, U.S. securities law creates uncertainty. A vault may attract regulatory scrutiny when investors depend on a curator to select strategies, allocate assets or manage risk. That level of discretion could raise questions under securities, investment company or investment adviser rules.

The issue is especially important for institutions, which require clear standards for custody, compliance and investor protection before committing significant capital.

Grayscale nevertheless sees substantial potential. Its central conclusion is that vaults “may be the next crypto innovation to break through to the mainstream.”

Their success will depend on whether the industry can preserve the efficiency of smart contracts while meeting the legal and operational standards expected in traditional finance.

SEC Commissioner Hester Peirce said crypto vaults and onchain lending products may trigger U.S. securities rules, depending on how they are structured. The comment adds to the regulatory fog around a product category that Grayscale wants to see take off.