Bitwise’s new real-world asset vault, ticker PAPY, pulled in over $8 million in deposits within its first day of existence. For a product that launched with just $639,000, that’s the kind of growth curve most DeFi protocols would frame and hang on a wall.
The Bitwise Premium RWA Vault went live on September 2 on the Morpho lending protocol on Ethereum. By September 3, deposits had crossed $8.022 million in AUSD, Agora’s USD-pegged stablecoin. The vault was offering an instantaneous net APY of 5.22%, sitting neatly within its target range of 5-6%.
How the vault actually works
PAPY is a non-custodial vault, meaning Bitwise curates the strategy but never takes custody of user assets.
The deposits, denominated in AUSD, are allocated to overcollateralized tokenized real-world assets. The current breakdown: 46.59% goes to Huma Finance’s PST, 29.23% to Hastra PRIME, and 24.18% to sUSDai.
AUSD itself carries some institutional pedigree. Its reserves are managed by VanEck and custodied at State Street. The stablecoin is backed by short-term US Treasuries and liquid assets.
Bitwise’s role is to set the parameters: eligible collateral types, loan-to-value ratios, and interest rate configurations. The vault charges a 0.39% management fee with no performance fee. The vault’s capacity is capped at approximately $1 billion. At $8 million, it’s used less than 1% of that headroom.
Why $8M in one day matters
For context, Bitwise manages $9 billion in client assets across its broader business. The firm has been steadily building its on-chain infrastructure, having announced non-custodial vault curation on Morpho back in January. PAPY is the product of that groundwork.
A 5-6% APY target might look modest next to the double-digit yields advertised across DeFi. But the yields come from real credit flows, not from token emissions or speculative leverage.
The competitive landscape for on-chain yield
Bitwise is not operating in a vacuum. BlackRock’s BUIDL fund, Franklin Templeton’s on-chain money market fund, and Ondo Finance’s tokenized Treasury products are all competing for the same pool of capital.
The no-performance-fee structure is also notable. Bitwise’s 0.39% flat management fee positions PAPY as a low-friction entry point for capital that might otherwise sit in traditional money market accounts earning similar yields.
The overcollateralization requirement means borrowers must post more collateral than they receive in loans, reducing the blast radius if a borrower defaults.