Vault Infra Wars

Early crypto security was simple. Strategies were managed by individuals not institutions. As DeFi grew, the complexity of available strategies increased exponentially. By combining DeFi legos, asset managers utilize numerous protocols across different chains to maximize yield.

Auto compounding vaults emerged in 2020 were with players like Yearn, Beefy and Harvest simplifying basic strategies like auto compounding. OpenZeppelin released official ERC-4626 reference contracts in April 2022, kicking off teams like Sommelier and Enzyme which allowed for a strategist to manage capital across protocols and chains.

As strategies increase in complexity, a new wave of vault infra providers emerge. These teams aim to provide tools and automations for asset managers to run their desired strategies.

“Onchain Capital Allocator” was listed as a category in July 2024 reaching $10B today and is one of the fastest growing categories.

Recent Winners

Native Curators

Risk curation teams established by the vault infra provider are common. Eg. Veda & SevenSeas, Concrete & Blueprint finance. This can create a potential conflict of interest where curators are competing with native curators for liquidity and prioritization if vault strategies are run with similar assets. Midas and Upshift focus solely on providing vault infra and may be less biased partners, helping more with LP connections and distribution.

Fees

Each vault provider has a different fee structure. Most focus purely on a management fee and are flexible based on the amount of TVL expected. Fees are highly competitive as these infra providers are fighting for market share. Eg. MEV Capital’s Liquid BTC Veda Vault and Upshifts Core USDC vault charge no platform, performance or management fees. The fee structure and split is negotiated between the vault provider and curator.

Incentives

Veda, Upshift and Concrete have active points campaigns incentivizing depositors and asset managers. The end result of many of these vaults is largely the same user experience: “Mint vault share and earn yield”. Additional incentives play a key role in the allocation of capital. Much like L2 incentives it can be expected that liquidity will shift between competing vaults based on the success of their campaigns. Midas on the other hand has been able to attract significant TVL without any public incentives.

Who to pick?

As a curator, protocol or chain, the vault infrastructure selected will be based on the strategy you intend to run and the requirements of your liquidity providers.

Veda is viewed as highly secure but lacks flexibility and timely updates on new strategies. Veda is a strategic decision if you are looking to scale a strategy curated by SevenSeas, leveraging the BoringVault which secures billions.

Midas could be the best option for Hedge Fund like operations, requiring high levels of customization with multi-chain strategies. Commonly used for stablecoin strategies.

Concrete is optimized for automation, lending and pre-deposit’s, likely the best option if you are a chain or protocol looking to tap into a team of strategists who will help build and run your vault.

Upshift is positioned as a flexible option for protocols and teams who are already partnered with a curator or looking to curate themselves. The infrastructure is similar to Midas with an addition of being able to utilize August smart contracts.

Special Mentions

Enzyme; $147M TVL, launched in 2017, over 4k vaults, recently launched Onyx
Lagoon; $285M TVL, launched in 2024, ERC-7540 smart contract (asynchronous vault standard)
IPOR Fusion; $124M TVL, launched in 2024, Plasma Vaults offer “Fuse” integration, simplifying setup for certain strategies.

Conclusion

Vault infrastructure is expanding the DeFi market as a whole, optimizing capital efficiency and introducing new capital from traditional funds. As capital allocation matures, these teams are serving as the coordination layer of DeFi, abstracting complexity while enabling programmable asset management at scale. Despite competition, vault infra providers ultimately share the same goal: building the operating system for onchain finance.