The trend of institutions seeking to generate returns on their bitcoin holdings is gaining momentum, with finance platform Mezo announcing its entry into the market with a new product designed to help institutions earn yield on their bitcoin assets. Mezo Prime is introducing segregated vaults, known as Enclaves, which enable institutions to earn yield on bitcoin held in custody with Anchorage Digital Bank.
This development reflects a broader change in how institutions perceive bitcoin, shifting from viewing it primarily as a store of value to recognizing its potential as a capital-generating asset. The emergence of bitcoin-native yield infrastructure has driven this change, with projects like Rootstock and Babylon developing mechanisms that allow BTC to be utilized in lending, collateralized borrowing, 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 historical limitations to 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 being rehypothecated. While 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 recognition of bitcoin as a productive financial asset, rather than simply a digital equivalent to gold.