The demand for generating returns on bitcoin holdings is gaining momentum, prompting finance platform Mezo to offer a solution for institutions to earn yield on their bitcoin assets. Mezo Prime has introduced segregated vaults, known as Enclaves, which enable institutions to generate returns on bitcoin held in custody with Anchorage Digital Bank.
This move highlights a shift in how institutions perceive bitcoin, transitioning from a passive store of value to a capital-generating asset. The emergence of bitcoin-native yield infrastructure has driven this change, with projects like Rootstock and Babylon developing mechanisms for bitcoin to be utilized in lending and other financial strategies within the Bitcoin ecosystem. Mezo's Enclaves are designed to meet institutional requirements for asset segregation, reporting, and risk controls, addressing limitations that have historically hindered participation in crypto lending and decentralized finance.
The project has received 250 BTC ($19.4 million) in funding from Bullish, which is also among the first users of the product. Bitcoin deposited into the vaults can be locked to earn protocol fees or used as collateral to borrow MUSD, a bitcoin-backed stablecoin, without the risk of rehypothecation.
Although institutional adoption of such products is still in its early stages and yields are relatively low compared to other crypto assets, Mezo's initiative demonstrates that institutions are increasingly treating bitcoin as a productive financial asset rather than just a digital equivalent of gold.