Ether.fi allocates $100 million to a Plume RWA vault, giving users access to yield

Plume, an onchain vault manager, and ether.fi, known for its Ethereum liquid restaking protocol, have teamed up to launch a new yield-bearing real-world asset (RWA) vault.

As part of the initiative, ether.fi has "exclusively" allocated $100 million to the vault. The allocation comes from a mix of ether.fi's liquidity provider base, including funds, family offices, and high-net-worth individuals, as well as managed capital from its existing liquid vaults (that is, liquid ETH, liquid USD, and liquid BTC yield products), which collectively hold around $300 million in total value locked, Charles Mountain, head of ecosystem at ether.fi, told The Block.

"We're seeing very strong demand for earn products with institutional-grade risk and a reduced DeFi surface," Mountain said.

Plume co-founder and CEO Chris Yin told The Block that his team spent several months with ether.fi to better understand the demand landscape. "We then went out and sourced, did due diligence and constructed specific vaults that fit what the ether.fi ecosystem is looking for both for them as a partner and their users," Yin said.

The new vault, available directly through ether.fi's app, is aimed at giving ether.fi and its users access to yield from tokenized RWAs.

"Onchain yield is changing, with users looking for more stable yield options following the volatility and exploitative risks of DeFi," Plume said.

The launch comes as tokenized RWAs continue to be one of the fastest-growing areas of crypto. Over the past year, major asset managers, including Apollo, WisdomTree, Hamilton Lane, and BlackRock, have expanded tokenization efforts as investors seek exposure to traditional financial products on blockchain networks.

Vaults have emerged as one of the most popular ways to package those opportunities. Rather than requiring users to manually manage multiple protocols and positions, vaults bundle strategies into a single product with easier deposits and withdrawals.

Plume said its RWA vaults are similar to structured income products and give users access to yield from a basket of institutional assets, including overcollateralized credit pools, AAA-rated collateralized loan obligations, and total bond market exchange-traded funds sourced from asset managers that collectively oversee more than $10 trillion in assets.

Plume further said its vaults are non-custodial and compliance-focused, supported by the company's recent Bermuda Monetary Authority license and Securities and Exchange Commission transfer agent approval through Kimber Transfer Agency.

Ether.fi is also one of the largest crypto card providers.