Something interesting is happening in what is usually a boring area of corporate finance. According to David Pakman, managing partner at venture capital firm CoinFund, financial executives are looking to place their companies’ excess cash in DeFi vaults rather than money market funds or other familiar short-term investments. If this happens, it would attract billions of dollars of new assets to crypto.
The term DeFi vault, if you’re unfamiliar, describes protocols that allow investors to earn returns through decentralized smart contracts. Consider platforms like Aave, Yearn Finance or Morpho, which act as automated asset managers. They’re not new, but Pakman says they’re attracting new attention from the corporate world as part of its broader push toward stablecoins.
To understand the context, it helps to know that cash inflow management is a full-time job in large companies. The balance sheets of Microsoft and Apple, for example, list approximately $102 billion and $55 billion in the categories of cash, “cash equivalents,” and short-term investments like stocks, respectively. The people who oversee these cash reserves are of course not stupid and are looking to add a little more juice to profits by maximizing yield.
This process usually involves calling a bank during business hours and arranging a money market transaction or something similar. However, there is now an interesting alternative in DeFi, which generally offers higher returns and, unlike conventional financial instruments, the possibility of investing in very short periods without problems.
Pakman says his firm advises traditional businesses, including a large consumer technology company, on how to connect their money to DeFi vaults, usually through stablecoins. Although the recently passed Genius Act prohibits stablecoin issuers from paying interest, this ban does not apply to a range of other players, including DeFi platforms. This offers a fairly obvious workaround and, as Pakman observes, “the cat’s out of the bag.”
No well-known corporate brand has publicly stated that it is investing money in DeFi, but it probably won’t be long before they do so. I say this in part because I invested in Pakman, an experienced VC who has worked at Venrock and Apple, and who is not one to hype. But I also think that traditional businesses will start putting their money into DeFi because it makes sense: the best platforms are super secure, faster and more lucrative, so why not use them to get a little extra return?
If you want another sign of how quickly crypto is entering the mainstream, Pakman mentioned in passing that he teaches a DeFi-related course at the University of Southern California – and his course is one of at least eight on crypto. Less than a decade ago, including Bitcoin in a curriculum would have seemed radical, but now cryptography is part of the university curriculum. There is no going back.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
DECENTRALIZED NEWS
Dark times for DATs: It was a tough month for digital asset treasury companies, as the flagship strategy saw its market capitalization drop to $70 million after hitting an all-time high of $128 million in July. Other DATs have performed worse, leading skeptics to say one of the hottest trades of 2025 is unfolding. (WSJ)
Paris Up Tempo: The Tempo blockchain project, launched this year by Stripe and Paradigm, is already making its own bets. The payments-focused blockchain said it has invested $25 million in crypto infrastructure startup Commonware. (Fortune)
Five years in prison for writing code: A US judge handed down the maximum to the founder of Samourai Wallet, saying he turned a blind eye to bad actors using the Bitcoin privacy wallet. Some criticize the Trump administration for failing to defend figures in the crypto industry unless they are wealthy. (Reason)
Is Ripple real? The long-running crypto company raised an impressive $500 million at a $40 billion valuation, but skeptics wonder if there is a business case for Ripple – or if investors simply used the deal to buy XRP at a discount. (Unchained)
A fun deal at Polymarket: A new academic research paper, echoing news first reported by Fortune– finds that the popular betting site is full of wash trading, adding that such trading does not add liquidity or information to the market. (Bloomberg)
MAIN CHARACTER OF THE WEEK
Eric Lee—Bloomberg/Getty Images
This week’s main character goes to Robinhood CEO Vlad Tenev, whose company posted record revenues thanks to strong crypto activity in the third quarter. During a live earnings call, Tenev also announced that Robinhood would double down. prediction markets and tokenized shares.
EVEN WHERE
@rektmando
The president’s promise to the money printer goes brrrrr Cash distributions and 50-year mortgages likely helped boost Bitcoin, which saw a modest rebound over the weekend.
