Capital flowing into crypto vaults surged past $6 billion in 2025, with projections indicating it could double by the end of 2026. This growth highlights a sharp split emerging between vaults with robust engineering and controls and those that are essentially yield packaging, according to Nassim Alexandre, vaults partner at RockawayX.
A crypto vault is a managed fund structure deployed on-chain where an investor deposits capital and receives a token representing their share. A curator then allocates that capital according to a defined mandate. The structure can be custodial or non-custodial, with portfolio rules often encoded directly into smart contracts.
Alexandre emphasizes that the central question for investors is exposure: "what am I exposed to, and can it be more than I am being told?" He outlines three critical risk layers: smart contract risk, underlying asset risk, and redemption risk. The quality of a vault is largely dependent on its curator, who selects eligible assets, sets parameters, and continuously monitors the portfolio.
Curated vault strategies typically target 9-15% annual returns, depending on mandate and assets. Key advantages include transparency, as every allocation and parameter change happens on-chain and is verifiable in real time, and composability, allowing users to borrow against collateral positions directly without traditional loan documentation overhead.
In a related "Ask an Expert" segment, Lucas Kozinski, co-founder of Renzo Protocol, addressed risk mitigation in DeFi vaults. "The first thing is minimizing complexity. Every additional protocol in the stack is another attack surface," he stated. Kozinski emphasized the importance of transparency, timelocks for parameter changes, and sound architecture over audits alone.
Regarding the future of yields, Kozinski noted that while institutional capital inflow may compress yields in simple strategies, composability remains a key differentiator from traditional finance (TradFi). "The alpha won't disappear. It'll just move to whoever builds the most efficient capital pathways between strategies," he explained. He also predicted that the integration of Real World Assets (RWAs) will increase the correlation between crypto yields and global macro interest rate cycles, but will also provide greater capital efficiency and optionality.
Separately, a market analysis for Q2 2026 identifies top altcoins positioned for growth as DeFi accelerates. The outlook is shaped by regulatory clarity, real DeFi usage, and infrastructure development. Key projects highlighted include:
Ethereum (ETH) is cited as the core of DeFi growth, benefiting from Layer-2 adoption, institutional staking flows, and RWA tokenization. Polygon (POL) is positioned as a key scaling solution, with its zkEVM and multi-chain strategy attracting DeFi migration. Chainlink (LINK) is deemed critical for powering secure data feeds for RWA tokenization and compliant DeFi. Aave (AAVE) is noted as a mature lending protocol with institutional-grade frameworks. The analysis also underscores the foundational role of stablecoins like USDC in the 2026 market outlook, driven by payment integration and regulatory clarity.
The selection criteria for these altcoins focus on real utility, on-chain revenue signals, regulatory positioning, and infrastructure importance, reflecting a market shift away from hype-driven cycles toward sustainability and compliance-ready assets.
