Grayscale Sees On-Chain Vaults Disrupting $1.5T Credit Market

Grayscale's Head of Research Zach Pandl believes that on-chain vaults could disrupt the massive $1.5 trillion credit market, following in the footsteps of stablecoins and perpetual futures.

Pandl compared the on-chain vault market to collateralized loan obligations (CLOs), which allow investors to share interest earned from a pool of individual corporate loans handled by asset managers and custodians. However, instead of these third parties, smart contracts and curators like Steakhouse or Gauntlet take their place.

The current vault market is worth around $7.3 billion, with the top three curators - Steakhouse, Sentora, and Gauntlet - controlling over 70% of the market share. There are 57 curators and over 3000 managed vaults seeking yield for investors.

S&P Global agrees that real-world asset (RWA) tokenization and regulatory clarity could unlock vault growth, with a focus on expanding RWA applications as the dominant use case.