New Paradigm of On-Chain Asset Management: How Non-Custodial Vaults Achieve Transparent Yields

Author: @MerlinEgalite
Compiled by: Peggy, BlockBeats

Original Title: How to Evaluate a Curator’s Quality?

Editor’s Note: As DeFi shifts from high-yield-driven to a focus on system and infrastructure competition, Morpho is attempting to reshape on-chain lending organization through Vault and Curator mechanisms. This article introduces the role positioning of Curator and its non-custodial, programmatic operational logic from the platform perspective.

Below is the original text:

What is a Curator?

A Curator is an independent team or entity, not part of Morpho’s official organization — responsible for designing, deploying, and managing on-chain Vaults (treasuries).

From a macro perspective, the work of a Curator is to package diversified investment portfolios into user-friendly, easily integrable Vault products.

Specifically, Morpho Vaults are essentially investment portfolios composed of over-collateralized lending positions. This structure allows users to: deposit through a single entry point; earn yields with one click; and delegate ongoing risk management and portfolio construction to the Curator.

In traditional finance, the closest roles to a Vault Curator are asset managers or fund managers. Both are responsible for strategy formulation and risk management, but there are fundamental structural differences: Vault Curators are non-custodial, executing fully automated processes via smart contracts with complete transparency, rather than relying on manual intermediaries.

In Morpho Vaults, Curators can never take custody or control of user funds. Their role is to execute predefined strategies by programmatically configuring Vaults.

Users can deposit or withdraw funds at any time freely, without anyone’s approval, and there is no possibility of manual obstruction; ownership and control of assets always remain with the user.

Business Model of a Curator

A Curator can earn rewards through: management fees; performance fees.

The specific fee structure is set by the Curator itself and can be configured for different Vaults, but must adhere to preset maximum fee limits.

Some Curators choose lower fees; others rely on their historical performance or differentiated strategies to charge higher fees. These decisions are entirely at the discretion of the Curator and are unrelated to Morpho.

Additionally, Curators can collaborate with distributors (such as fintech companies or platforms) to share revenue, distributing certain fees generated from specific deposits between the Curator and the distributor.

While the business model of a Curator resembles that of traditional asset managers, there is a key difference: the operating costs of Vaults are far lower than those of traditional funds or asset management platforms.

Vaults use a few hundred lines of free, open-source code to replace the large backend systems typical of traditional asset management. Most processes are automated, running in real-time on-chain, eliminating the need to wait for quarterly reports.

Therefore, Curators often can maintain attractive profit margins while charging fees lower than those of traditional financial counterparts.

How to Evaluate a Curator (Non-Exhaustive List)

For enterprise institutions, evaluating a Curator should be familiar. It’s similar to assessing traditional asset managers but with a significant advantage: complete transparency.

Vaults are built on public blockchains, and with various dashboard tools, detailed data of any Curator or Vault can be viewed in real-time.

Here are some key evaluation dimensions:

Track Record

• What experience does the Curator have in DeFi (and related traditional finance sectors)?
• Have they collaborated with well-known enterprises, fintech firms, or institutions?
• How does their strategy perform across different market cycles, especially during stress tests?
• How much capital is currently managed within all Vaults?
• While fund size alone doesn’t guarantee quality, it is often a useful indicator of market trust and product fit.

Transparency & Methodology

• Are the asset allocation methods and risk control standards clearly explained?
• Has an internal risk rating system been established?
• Are response procedures during market tightening or extreme events disclosed?
• How are roles and permissions within each Vault divided?
• Do they follow strict operational security (OpSec) practices?
• Are any insurance or risk mitigation mechanisms provided?

Communication

• Before depositing funds, review the Curator’s public channels, such as X (Twitter) and official websites.
• Do they maintain proactive communication during high-yield periods and market turbulence?
• Do they regularly update on Vault performance, asset allocation changes, and risk events?

Conflicts of Interest

• Are actual or potential conflicts of interest clearly disclosed?
• Are there financial or governance relationships with certain protocols, investors, or counterparties that could influence allocation decisions?
• Like traditional finance, responsible institutions should clarify the sources of conflicts and how they are managed.

By evaluating through these dimensions, institutions can select a Curator whose strategy style, risk appetite, and information disclosure standards align with their needs, while relying on Morpho’s underlying infrastructure, which provides a robust and tamper-proof systemic guarantee.