Institutional Yield as a Service: Bridging TradFi and DeFi

Hook: Crypto Asset Management Meets Traditional Finance

Hook: In 2024-2025, DeFi yield collapsed from 12% APY (two years ago) to 4% APY, forcing global institutions to abandon pure crypto strategies and combine traditional finance techniques (delta-neutral, options, derivatives hedging) with blockchain infrastructure. The panel "Institutional Yield as a Service: Bridging TradFi and DeFi" brought together Coinchange (YaaS global), Findex (infrastructure API), B2C2 (market making/liquidity), and Credit Markets (tokenized RWA) to reveal the institutional playbook: 80% CeFi (centralized finance intermediaries) + 20% pure DeFi for 2025, with retail adoption through platforms that abstract DeFi complexity entirely.

5 Key Learning Points:

• Yield as a Service: Custody Monetization: Fintechs, neo-banks, and wallets that custodied digital assets historically earned zero yield. YaaS integrates DeFi (lending pools, liquid staking, derivatives) to generate returns, pay users a portion, and retain operational margins. Coinchange deploys YaaS globally across licensed jurisdictions with custom asset management products. Enables platforms to "monetize custody and generate new revenue streams." Source: Manuel Dear Fin, Coinchange LATAM 2024-2025.
• Mandatory TradFi-DeFi Convergence: Crypto asset management is converging toward traditional asset management, not the reverse. Macro hedge funds (top-500 USA) now combine: delta-neutral strategies, options, derivatives hedging, and DeFi liquidity parking. Brazil example: crypto arbitrage (USDT-BRL-USD, BTC-BRL-USD) requires liquidity parks in yield strategies between opportunities. Source: Marco, B2C2 Brazil 2024.
• 2024 Institutional Demand: RWA + Private Credit: Institutions seek: (1) Real World Assets (tokenized, D+1 liquidity), (2) Private credit (30-90 days), (3) Diversification beyond DeFi. Liquid staking and "yield farming" represent 36% of DeFi revenue. Blackrock, Wisdomtree, Block Tower entering with on-chain tokenized assets. Source: Rodrigo Tindaji, Credit Markets 2024-2025.
• Critical Risks: Counterparty, Custody, Smart Contract: When assets leave institutional vaults (fiat or token), emerge: (1) Counterparty risk (if intermediary fails), (2) Smart contract risk (protocol vulnerabilities), (3) Unexpected liquidation. Some banks build proprietary infrastructure; B2C2 (owned by Japanese bank) offers balance-sheet guarantees. Transparency in underlying assets essential. Source: Marco (B2C2); Rodrigo Tindaji (Credit Markets) 2024-2025.
• Future: 80% CeFi + 20% DeFi; Retail Non-Custodial: For institutions: centralized finance intermediaries (CFI - Crypto Finance Infrastructure) that abstract complexity, assess risk, ensure compliance. For retail: platforms abstracting DeFi (users unaware they interact with blockchain), especially in high-inflation countries (wallet access, non-custodial). Findex provides API for wallets/neo-banks to connect diverse strategies. Source: Steanes (Findex), panel 2024-2025.

5 Session Summary Subsections:

1. Yield as a Service: Digital Custody Monetization

Platforms custodying assets (fintechs, neo-banks, wallets) historically simply stored tokens without generating returns. YaaS enables: (1) DeFi integration (lending, liquid staking), (2) Yield generation, (3) Payout to users, (4) Operational margin retention. Coinchange operates as "asset management as a service" globally, designing custom products per treasury requirements. Allows platforms to "monetize custody and generate new income streams." Source: Manuel Dear Fin, Coinchange 2024-2025.

2. Distribution Infrastructure: Abstracting DeFi Complexity

Findex provides "distribution layer" via API so fintech apps (neo-banks, wallets, crypto apps) plug DeFi yield, tokenized RWA, and other strategies with one connection. Key: real-time risk management, automatic rebalancing, complexity abstraction for end-users. Steanes reports users "don't need to know which DeFi strategy" assets are in; they need "high-quality product." Infrastructure lets fund managers curate strategies, rebalance, seek better yields. Source: Steanes, Findex 2024-2025.

3. Market Making and Liquidity: B2C2 as Invisible Infrastructure

B2C2 (owned by Japanese bank) provides liquidity and market making for B2B (asset managers, retail platforms Brazil). Marco describes role: "invisible but critical" to ensure end-users get "best pricing and best credit conditions." B2C2 hedges all trades (futures, options, DEX, DeFi parking) to manage risk. Interfaces with DeFi for liquidity parking between trades. "If you use a platform in Brazil, good chance you're buying from B2C2." Provides secure counterparty focal point (Japanese bank backing). Source: Marco, B2C2 Brazil 2024-2025.

4. Credit Markets and Tokenized RWA: Transparency and Legal Evolution

Credit Markets abstracts complexity for foreign investors accessing emerging markets credit (LATAM, Africa). Three 2024 institutional adoption challenges: (1) Full underlying asset transparency (what backs the operation?), (2) Legal tokenization (today token = proxy to asset, not asset itself; Brazil experiments with Nuclear for tokenized receivables), (3) On-chain payment flows (today payments are off-chain via banks; future = stablecoins + on-chain enforcement). Rodrigo emphasizes "token isn't the asset itself"; requires "direct legal tender." Source: Rodrigo Tindaji, Credit Markets 2024-2025.

5. Strategic Convergence: Institutions Require Intermediary Layers

The belief that "crypto asset management should look like crypto" is wrong. "Crypto asset management will look like traditional asset management." Manuel predicts: combination of "TradFi + DeFi in same product." Examples: delta-neutral strategies, traditional options built in blockchain/DeFi. Institutions (CFOs, boards, auditors) need clear risk explanation. "Nobody will accept liquidation or smart contract risk without understanding it." This is why intermediary layers (CeFi + compliance assessment) are essential. Manuel projects future: "80% centralized yield as a service, 20% pure DeFi." Retail different: non-custodial decentralized DeFi for unbanked and high-inflation countries. Source: Manuel Dear Fin (Coinchange), Steanes (Findex), panel 2024-2025.

FAQ:

Q: Why don't institutions access DeFi directly instead of using intermediaries?
A: Counterparty risk. When assets leave institutional vault, someone must assess and absorb risk. CFOs can't explain to boards why losses happened from smart contract vulnerability. Intermediaries (B2C2, Coinchange, Findex) act as "risk layers" assessing security, compliance, asset management. Banks (e.g., Japanese bank backing B2C2) offer balance-sheet guarantees. Source: Marco (B2C2), Manuel (Coinchange) 2024-2025.

Q: What's the difference between DeFi "yield farming" vs tokenized RWA?
A: DeFi yield (4% APY in 2024) comes from lending protocols, liquidity pools, derivatives. Tokenized RWA (private credit) offers 8-12%+ yields but requires: underlying transparency, legal clarity (is token = asset?), on-chain payment flows. Institutions seek diversification because DeFi yields are low; private credit offers alternative. Source: Rodrigo Tindaji (Credit Markets) 2024-2025.

Q: How does Yield as a Service generate money for fintechs/wallets?
A: Fintech custodies $1M user stablecoins. YaaS integrates that $1M to lending pools (e.g., Aave, Compound) generating 4-6% APY. Fintech pays user 2% APY, retains 2-4% as operational margin. Scale: millions of users × 2% margin = significant revenue streams without users assuming direct DeFi risk. Source: Manuel Dear Fin (Coinchange) 2024-2025.

Q: What does "80% CeFi + 20% DeFi" mean in practice?
A: For institutions 2024-2025: most use centralized intermediaries (B2C2, Coinchange, Findex) offering options including DeFi but with risk assessment. 20% sophisticated crypto funds interact directly with DeFi protocols (Morpho, lending pools). For retail: platforms like Findex abstract DeFi; users deposit unaware $$ goes to DeFi. Result: institutional adoption via intermediaries; retail adoption via simplified UX. Source: Panel 2024-2025.

Q: Why is private credit more attractive than DeFi yield for 2024-2025?
A: DeFi yield collapsed to 4% APY (from 12%). Private credit (Credit Markets, tokenized RWA) offers: 8-12%+ yields, 30-90 day maturities, emerging markets access (LATAM, Africa). Institutions seek better returns; private credit = alternative. Limitations today: legal clarity, off-chain payment flows, transparency. But rapid 2024-2025 ecosystem growth. Source: Rodrigo Tindaji (Credit Markets), Steanes (Findex) 2024-2025.