[Recap] Enabling Institutional Access to On-Chain Yield

The latest The Tie Innovator Webinar brought together Griffin Peer, Head of Business Development, at Reserve and David Markley, Co-Founder, of XSY to explore how institutions are engaging with on-chain yield. Moderated by Heidi Picket, Chief Business Officer, The Tie, the discussion covered how capital allocators are navigating regulatory constraints, evaluating yield opportunities, and adopting operational frameworks that support secure, compliant, and scalable participation in DeFi.

Both panelists agreed that the institutional conversation around DeFi yield has shifted from exploration to deployment. David Markley noted that on-chain yield-bearing assets have grown from ~$1B to over $18B in under two years, with expectations of substantial increase in TVL by 2027. He attributed this to growing demand from institutions seeking tools to hedge against monetary debasement without taking on asset volatility. Griffin Peer added that Reserve is seeing similar momentum, with more compliant infrastructure and trusted tooling in place institutions are not only allocating but also seeking index-based exposure to staking and stablecoin strategies. He emphasized that trust built through audits, transparency, and peer adoption is accelerating Reserve’s traction with allocators.

When asked about barriers to broader adoption, both panelists pointed to operational workflows and organizational readiness. Griffin explained that while the products exist, many institutions still require DeFi assets to be wrapped in familiar TradFi structures. Purely on-chain products can halt conversations if they don’t fit existing operational workflows. David agreed and framed the main challenge as cultural, not technical. While the DeFi infrastructure now meets most due diligence standards, many organizations still face internal hurdles—governance processes, legal reviews, and compliance workflows that slow on-chain adoption.

The discussion also examined how Reserve and XSY have architected their products to meet institutional expectations for control, security, and compliance. Griffin described Reserve’s Decentralized Token Folios (DTFs)—index-style, permissionless crypto baskets built on-chain—as products designed with transparency and flexibility in mind. With ongoing audits, a $10M bug bounty, and proof-of-reserves available on-chain, he highlighted how Reserve is investing in the infrastructure institutions require to deploy at scale. He also introduced the Digital Securities Initiative (DSI)—an effort within Reserve’s ecosystem to align DeFi protocols with U.S. regulatory standards for KYC, AML, and tokenized securities. David shared how XSY’s Unity (UTY) product enables institutions to access delta-neutral, crypto-derived yield strategies without direct market exposure. The design emphasizes three pillars: operational risk minimization, custodial control, and full transparency. Unity is built for institutional scale, featuring automated queuing for redemptions, diversified venue access, and 24/7 on-chain proof-of-reserves, which XSY considers the gold standard for trust in DeFi.

The panel then explored how institutions are accessing yield at scale, both directly and through intermediaries. Griffin described a dual-path approach: crypto-native institutions engage through composability, looping, and DeFi-native strategies; while more traditional institutions require wrappers that plug into legacy infrastructure. Reserve supports both, offering integrations through exchanges like Kraken as well as on-chain minting for customized portfolios. David emphasized the importance of meeting institutions where they are. XSY supports direct minting from custodians, and also partners with corporate treasuries and stablecoin foundations to integrate yield strategies into existing workflows. The goal, he said, is to abstract away operational complexity while maintaining control and compliance.

Both panelists discussed which on-chain yield products are resonating most with allocators. Griffin highlighted Reserve’s success with liquid staking tokens (e.g., ETH+), noting strong demand for looped and collateralized use cases. He also pointed to growing interest in blue-chip index exposure and stablecoin strategies, while acknowledging that scaling DeFi-native yield to the multi-billion-dollar level remains a challenge. David explained that delta-neutral yield has been XSY’s core focus, offering institutions double-digit returns. He emphasized that Unity is designed to simplify access to advanced DeFi strategies—eliminating the need for trading desks, perpetual management, or multi-exchange operations—by abstracting everything into a single token.

The panel closed with a discussion on what to expect in the next 6–12 months. Griffin pointed to a wave of ETF-style crypto indexes, improved composability, and broader exchange integrations, including Reserve’s newly listed Large Cap Crypto Index on Kraken. He also forecasted continued innovation in DeFi infrastructure that powers retail-facing fintech wrappers. David noted that as XSY's products gain adoption, they’re starting to see institutions compose new strategies on top of UTY, such as collateralized borrowing and automated payouts. XSY is focused on building for deeper integration, enabling complex treasury operations to function entirely on-chain with built-in verifiability and automation.

The panel made one thing clear: the institutional era of DeFi yield is no longer theoretical. With compliant, composable infrastructure and risk-adjusted strategies, protocols like Reserve and XSY are helping institutions step confidently into on-chain markets. Whether through index-style folios or principal-protected neutral yield, both projects are responding to institutional mandates for control, transparency, and regulatory clarity—laying the groundwork for exponential growth in on-chain asset allocation.