[Recap] Leveraging Idle Assets to Generate Yield On-Chain

On June 18th, 2025, The Tie hosted a webinar as part of its Innovator Series—“Leveraging Idle Assets to Generate Yield On-Chain”—which convened institutional DeFi leaders from Function, Marinade Finance, and XSY under the moderation of Sacha Ghebali (Chief Strategy Officer, The Tie). The discussion began by noting a shift in institutional mindset: organizations holding digital assets now ask not only “what is blockchain?” but “how can we deploy idle BTC, SOL, or stablecoins to earn sustainable yield?” While underwriting smart-contract risk remains nascent, enterprises increasingly probe counterparties, track records, and risk controls, signaling growing curiosity even as they await clearer regulatory guardrails.

In a focused protocol spotlight, each panelist outlined their solution succinctly. Thomas Chen described Function’s rebranded ƒBTC as the “Bitcoin Institutional Yield Standard,” offering curated, single-strategy Bitcoin yield with emphasis on sustainability, security checks, and streamlined integration to minimize friction and withdrawal latency. Hadley Stern outlined Marinade’s institutional roadmap, highlighting how it leverages Solana’s native staking model—offering low minimum stakes, rapid unstaking epochs, and retained withdrawal rights. Hadley Stern also introduced “Marinade Select,” a vetted validator set designed to satisfy ETF and custodian due-diligence requirements, and noted an upcoming instant-unstake feature for large stakeholders. David Markley introduced XSY’s Unity vault on Avalanche. Allowlisted institutions supply collateral through custodial integrations and Unity allocates these assets across multiple venues using insurance funds and credit lines. The result is a fixed-income–style product offering double-digit annualized returns while abstracting away the complexities of the underlying derivatives.

The panel combined risk management and composability by noting that each protocol embeds robust safeguards: Function employs a due-diligence framework to evaluate yield sources, smart-contract and counterparty risks, and operational factors; Marinade leverages Solana’s native security model with vetted validators; and Unity relies on multi-day redemption queues, insurance-backed buffers, credit-line backstops, and audited infrastructure. These foundations enable layered strategies which the panelists discussed such as: institutions could borrow stablecoins against ƒBTC, deploy into Unity for yield, and stake proceeds via Marinade, ideally orchestrated through a vault-like interface where allocators set risk tolerances and allocations in a few clicks. Panelists highlighted effective partnership frameworks—revenue-share agreements as low-hanging fruit, concierge-style services to guide institutions through technical nuances, and co-investment pools or white-label offerings for deeper collaboration. They also noted the emerging need for dedicated DeFi portfolio managers or crypto-native hedge funds, along with integrated dashboards to monitor exposures, peg health, hedging status, and evolving partnership economics.

Addressing institutional readiness and ETF integration, the panel emphasized that clear regulatory guidance is essential. They discussed how institutions piloting on-chain yield must establish custody integrations, secure legal opinions, and build compliance frameworks for staking, wrapped assets, or synthetic strategies. Along with transparency beyond headline TVL is essential: protocols should surface on-chain and off-chain reserve data, peg stability metrics, yield performance, hedging exposures, and labeled institutional wallet activity via verifiable proofs. As jurisdictions in Asia/APAC, Europe, and the Middle East experiment with stablecoin regulations and staking frameworks, protocols must adapt features and partnerships regionally, including indirect access models where direct deployment is restricted. The panel addressed DeFi-focused ETFs: upcoming staking ETF filings for Solana, Ethereum, and other proof-of-stake networks rely on clearer custody and redemption frameworks and standardized reporting. Function is preparing to embed ƒBTC yield into ETF wrappers; Marinade’s vetted validators and instant-unstake roadmap position it as a natural staking partner; XSY is designing its yield vault infrastructure to meet the liquidity and transparency requirements of regulated funds. Each new ETF approval is expected to accelerate institutional interest in on-chain yield and drive demand for composable, institution-grade building blocks.

Institutional DeFi remains in early but accelerating stages. Function, Marinade, and XSY offer solutions that transform idle BTC, SOL, and stablecoins into yield—and are poised to integrate with forthcoming ETF and ETP products. As regulatory guardrails firm up, market infrastructure evolves, and tooling matures, these offerings and their integrated workflows are poised to attract the next wave of institutional capital. For full details and nuanced discussion, we encourage watching the webinar recording.