The trend of institutions seeking to generate returns on their bitcoin holdings is gaining momentum, prompting finance platform Mezo to launch a new product that enables the creation of yield on the cryptocurrency. Mezo's introduction of segregated vaults, known as Enclaves, allows institutions to earn yield on bitcoin held in custody with Anchorage Digital Bank, as announced on Wednesday.
This development reflects a change in how institutions perceive bitcoin, transitioning from a passive store of value to a capital source that can produce immediate returns. The emergence of bitcoin-native yield infrastructure has driven this change, with projects like Rootstock and Babylon developing mechanisms for BTC to be utilized in lending, borrowing, and other financial strategies within the Bitcoin ecosystem.
Mezo's Enclaves are designed to address institutional concerns regarding asset segregation, reporting, and risk management, which have historically limited 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, allocating part of its treasury to the product while maintaining its existing custody framework. Bitcoin deposited into the vaults can be locked to earn protocol fees or used as collateral to borrow MUSD, a bitcoin-backed stablecoin, without rehypothecation.
Although institutional adoption of these products is still in its early stages and yields are relatively low compared to other crypto assets, projects like Mezo demonstrate a growing trend of institutions treating bitcoin as a productive financial asset rather than just a digital equivalent of gold.