Bankless
What's Next for Vaults? | Steakhouse Co-Founder, Adrian Cachinero
- Vaults as liquidity aggregators: Vaults are smart contract structures that bundle isolated lending markets to recapture network effects. The term is intentionally broad, encompassing everything from simple Morpho repo markets to complex discretionary asset management.
- Morpho's foundational role: Morpho pioneered isolated lending markets, reducing risk surface by simplifying smart contract logic. Vaults then composite these atomic units to regain liquidity benefits and efficiency that pooled models like Aave offer.
- Curator responsibility and risk management: Stakehouse and other curators make collateral onboarding decisions using frameworks centered on credit risk, platform risk, and haircuts. They mitigate their own agency risk through on-chain veto mechanisms and public commitments to allocate their own capital into vaults.
- Principal-agent tension: Curators earn performance fees on yield but don't lose principal in defaults—depositors do. While Stakehouse commits to "withdraw last," structural solutions via cryptographic enforcement are preferable to social contracts.
- Regulatory uncertainty and dual growth paths: Vaults could scale massively in boring, safe repo markets (trillions in TradFi activity moving on-chain) or in riskier, more discretionary hedge-fund-like vehicles. Both require thoughtful engagement with the SEC to define liability and investor protections without stifling permissionless innovation.
- Real assets and distributor tension: Integration of real-world assets (RWAs) will increase vault complexity and differentiation. Distributors (Robinhood, Coinbase) control retail relationships and margins; curators risk marginalization unless they specialize effectively enough to remain valuable partners.