Bitwise Launches PAPY Vault on Morpho with Variable Yield Target

Bitwise Asset Management has launched the PAPY real-world asset lending vault on Morpho, allowing users to deposit Agora's AUSD stablecoin and earn a variable annual percentage yield of 5%, 6%. The vault lends against approved tokenized collateral, which is overcollateralized according to Bitwise. The initial set of eligible collateral includes PST, sUSDai, and PRIME.

The vault does not take custody of deposits or make discretionary decisions over individual user assets. Deposits remain in user-controlled wallets and Morpho smart contracts. Bitwise Investment Manager, registered with the U.S. Securities and Exchange Commission for a separate advisory business, sets vault parameters including eligible collateral, loan-to-value ratios, and interest-rate configurations.

The launch targets institutional investors looking to diversify their portfolios and gain exposure to real-world credit structures through tokenized assets. However, Bitwise cautions that the actual yield may be higher or lower than the target, and users are exposed to risks such as smart-contract failures, oracle problems, and regulatory changes.