After the total value of on-chain assets surpassed the trillion-dollar level, a long-standing question has become increasingly apparent: who will help users manage these assets?
Over the past few years, DeFi users have become accustomed to self-directed operations — executing swaps on decentralised exchanges (DEXs), providing liquidity to pools, staking tokens for yield, and adjusting positions through lending protocols. This approach was intuitive enough for early adopters, but as asset categories expanded, on-chain opportunities became increasingly fragmented, and strategy complexity continued to rise, the efficiency limitations of manual asset management became more visible.
At the same time, institutional capital is accelerating its entry into the on-chain financial ecosystem. In Q2 2026, the market size of non-stablecoin tokenised assets grew from less than $3 billion in mid-2024 to approximately $34 billion. However, this figure remains relatively small compared with traditional global financial markets, where bonds, equities, and funds represent tens of trillions of dollars in value.
The core challenge for on-chain asset management is no longer whether it is possible, but whether it can achieve scalability and professional-grade execution.
Velvet Capital has attracted market attention at this critical stage. This article examines how on-chain asset management infrastructure is evolving through an analysis of its product architecture, token model, and competitive landscape.
Why On-Chain Asset Management Is Becoming a New Trend
User Demand: From "Users Can Manage Assets Themselves" to "Users Need Professional Strategies"
The original value proposition of DeFi was removing intermediaries — allowing users to directly trade, lend assets, and generate yields on-chain. This model was validated during the 2020 DeFi Summer, but challenges gradually emerged.
As the number of protocols expanded from dozens to thousands, as each blockchain developed its own leading DEXs and lending markets, and as yield strategies began requiring consideration of impermanent loss, liquidation risks, and cross-chain costs, the information-processing capabilities of ordinary users became increasingly insufficient.
On-chain vaults emerged as a solution. The introduction of the ERC-4626 standard provided a unified interface for vault deposits, withdrawals, and share issuance, enabling asset management strategies to be standardised and packaged.
Users no longer need to manually allocate assets across different protocols. Instead, they can deposit funds into vaults, allowing strategy managers to execute investment decisions on their behalf.
This model is essentially an on-chain version of hedge funds or structured investment products, but with greater transparency and composability.
Institutional Supply Side: From Observation to Participation
Institutional participation in on-chain finance is undergoing a major transformation. Over the past two years, tokenised US Treasuries, money market funds, and private credit products have gradually entered the market. Traditional financial institutions are increasingly viewing blockchain as financial infrastructure rather than merely a speculative technology.
The involvement of institutions such as BlackRock and Franklin Templeton demonstrates that the integration between RWA and DeFi is moving from conceptual exploration toward product implementation.
This trend creates clear requirements for asset management infrastructure: non-custodial architecture, auditability, multi-asset allocation capabilities, and institutional-grade execution efficiency.
Velvet Capital’s white-label solution attempts to address this demand by enabling asset managers to deploy DeFi vaults under their own brands without building the entire technology stack from scratch.
Velvet Capital Product Positioning Analysis
Velvet Capital positions itself as a DeFAI (DeFi + AI) operating system. Its core objective is to reduce the complexity of on-chain operations through AI-assisted tools while providing institutional-grade asset management infrastructure.
Its product ecosystem is built around three major components:
Tokenised Portfolios
Users can create on-chain vaults through Velvet and deposit assets to receive tokenised shares representing their positions.
Each vault operates through independent smart contracts, isolating potential security risks associated with shared infrastructure. This architecture allows investment portfolios to become tokenised assets with transferability and composability.
Strategy Vaults
Vault managers can establish unified execution logic, while subscribers receive the same entry prices and execution quality as the strategy managers.
Currently, more than 10,000 vaults have been created by KOLs, traders, and crypto hedge funds. Vault performance records are managed entirely on-chain, providing transparent and verifiable data.
Composable DeFi Products
Velvet provides execution APIs and white-label solutions, allowing developers and institutions to build customised applications on top of its infrastructure.
Currently, Velvet supports transaction execution across multiple blockchains, including BNB Chain, Ethereum, Base, and Solana.
In addition, Velvet integrates a multi-agent AI system that enables users to complete market research, generate technical analysis, and execute trades through natural language commands. Users can access these functions directly through Telegram.
This design aims to lower the cognitive barrier of blockchain operations by transforming complex strategy execution into conversational interactions.
Competitive Landscape: Velvet vs Yearn, Enzyme, and Index Coop
The on-chain asset management sector is not exclusive to Velvet Capital. Comparing Velvet with existing projects helps illustrate its differentiated positioning.
Yearn Finance is one of the earliest representatives of the on-chain vault sector. Its core model focuses on automated yield aggregation — users deposit stablecoins or major assets into vaults, and the protocol automatically allocates funds to lending markets or liquidity pools offering optimal returns.
Yearn’s strengths lie in its mature strategies and strong brand recognition. However, its product structure is relatively fixed, and users cannot easily customise strategies or create their own vaults.
Enzyme Finance provides a more flexible vault creation framework, allowing users to build customised portfolios and issue tokenised shares.
Enzyme offers stronger institutional features, such as permission management and compliance modules, but its user experience can be relatively complex for non-professional users.
Index Coop focuses on tokenised index products, allowing users to gain exposure to baskets of assets through a single token. Its model is primarily centred around passive investment rather than active strategy execution.
Compared with these platforms, Velvet Capital’s main differentiation lies in its "DeFAI" positioning — combining AI-assisted decision-making with on-chain vault infrastructure while providing white-label solutions for institutional users.
This places Velvet between a "tool provider" and a "strategy execution platform." However, it is important to note that the effectiveness of AI in investment decision-making has not yet been sufficiently validated over a long market cycle, and many AI-driven applications remain at an early adoption stage.
VELVET Tokenomics and Market Performance
VELVET has a total supply of 1 billion tokens and adopts a dual-token architecture consisting of VELVET and veVELVET.
Users can lock VELVET to receive veVELVET. Longer locking periods, with a maximum duration of 200 weeks, provide users with greater veVELVET balances. The veVELVET balance gradually decreases over time based on the remaining lock period.
Key benefits for veVELVET holders include:
- Protocol revenue sharing, where 50% of platform fees are converted into VELVET and distributed to veVELVET stakers
- VELVET ecosystem incentive emissions
- Trading fee discounts
- Velvet DAO governance voting rights
According to Gate market data, as of 12 August 2026, VELVET was priced at $0.55725, with a 24-hour change of -5.10%, a 7-day increase of 19.48%, a 30-day decline of 8.07%, and a one-year gain of 751.88%.
The token recorded approximately $5.85 million in 24-hour trading volume, with a current market capitalisation of around $139 million based on a circulating supply of approximately 248 million tokens, representing a circulating ratio of about 24.83%.
It is worth noting that VELVET experienced significant price volatility in June 2026, with weekly gains exceeding 1,300% at one point. However, on-chain data also showed token transfers associated with team wallets, triggering discussions regarding token distribution transparency.
In addition, future token unlocks may create potential selling pressure and remain an important risk factor to monitor.
Conclusion
On-chain asset management is evolving from a "DIY user experience" toward professional-grade infrastructure.
Through tokenised vaults, AI-assisted trading tools, and white-label solutions, Velvet Capital aims to establish itself as an infrastructure provider within this emerging sector.
However, the on-chain asset management market still faces several challenges. These include whether vault strategy performance can remain sustainable over time, whether AI-assisted decision-making can demonstrate long-term effectiveness, how future token unlocks may impact market dynamics, and whether institutional-grade infrastructure can successfully attract large-scale capital.
From a broader perspective, the integration of RWA and DeFi is reshaping the underlying structure of on-chain finance.
If tokenised government bonds, money market funds, and other low-volatility assets become widely available as investment options for blockchain-based vaults, the narrative of on-chain asset management could evolve from "crypto-native strategies" into a global asset allocation infrastructure layer.
This may represent the broader long-term opportunity for Velvet Capital and the entire sector.
FAQ
What is Velvet Capital?
Velvet Capital is a DeFAI (DeFi + AI) on-chain asset management platform that provides tokenised portfolios, strategy vaults, and white-label solutions. Users can complete market analysis, strategy execution, and asset management through natural language commands. The platform supports multiple blockchains, including BNB Chain, Ethereum, Base, and Solana.
What are the use cases of the VELVET token?
VELVET is the native token of the Velvet ecosystem, with a total supply of 1 billion tokens. Users can lock VELVET to receive veVELVET, which provides protocol revenue sharing (50% of platform fees distributed to stakers), governance voting rights, and trading fee discounts.
The maximum locking period is 200 weeks, and veVELVET balances gradually decay over time.
How does Velvet Capital differ from Yearn?
Yearn primarily focuses on automated yield aggregation, where users cannot customise vault strategies. Velvet allows users to create strategy vaults and integrates AI-assisted trading functions.
Additionally, Velvet provides white-label infrastructure that enables institutions to launch branded DeFi asset management products, positioning itself more as an infrastructure provider.
What are the investment risks of VELVET?
Key risks include potential selling pressure from token unlocks (team allocations follow a six-year linear vesting schedule), relatively high market capitalisation compared with actual protocol TVL, insufficient long-term validation of AI strategy performance, and previous on-chain data showing token transfers associated with team wallets.
