Why Mellow Finance Believes Curators Will Shape the Future of On-Chain Finance
In Brief
Mellow Finance believes curators will shape on-chain finance by leveraging its permissionless vault infrastructure to create diverse, scalable, and institutional-grade financial strategies.
Mellow Finance is quietly building the pipes for DeFi’s next transformation. With a modular, permissionless vault infrastructure powering over $600 million in total value locked, Mellow is enabling a new breed of financial strategies managed by curators across the ecosystem—from hedge funds to DAOs and everything in between.
In this interview, Etienne, Head of Ecosystem at Mellow, shares how the protocol’s curated vault model unlocks scale, composability, and institutional appeal. We dive into the mechanics behind Mellow’s growth, its role in the restaking boom, and how the lines between traditional finance, DeFi, and even AI are beginning to blur.
Can you share your journey into Web3?
I come from a finance and fintech background, where I worked for around 10 years. I’ve always been fascinated by finance, and when decentralized finance started gaining traction in 2020, I was already involved as an end user, providing liquidity to various protocols.
But soon I realized DeFi could be a real career path for me. So, I left my job at my own fintech company and began contributing to several DeFi projects, including DAOs and more traditional organizations across different ecosystems, like Starknet. In 2024, I met Nick, the founder of Mellow, and I immediately connected with his vision and the execution of the team. That’s how I ended up joining Mellow.
How does Mellow Finance’s curated vault model contribute to its impressive total value locked (TVL) growth, recently reaching $600 million?
I think it’s a mix of several factors. Mellow is a permissionless and modular vault infrastructure that enables anyone to create a vault, attract capital, and manage strategies. What you mentioned—the curated model—is gaining traction in DeFi. Essentially, we provide the infrastructure, but we’re not building the end product. Independent third parties create and manage the vaults, and they’re incentivized to build profitable businesses on top of Mellow.
This approach unlocks strong network effects because, instead of one team building both infrastructure and products, dozens or even hundreds of teams can build their own products tailored to their specific audiences. It’s part of a broader shift from what we used to call “decentralized finance” to what might better be described as “on-chain finance”—where sophisticated players build bespoke strategies off-chain while sourcing liquidity on-chain.
Publishing strategies on-chain creates front-running risks, so keeping strategy logic off-chain is key, especially to attract institutional interest. That’s the next major growth pocket, both for DeFi and us.
What role do curators play in assessing risks and monitoring selection mechanisms within the Mellow Finance ecosystem?
Mellow has one of the most diverse ecosystems in terms of curators. We work with a wide range of sophisticated actors. The more traditional ones include hedge funds, liquid funds, and risk managers. These Web3-native companies don’t just curate vaults on Mellow; they also manage markets.
Then, we have protocols and DAOs that use our stack to access new yield and risk primitives without having to build from scratch. Node operators are also part of the ecosystem, particularly in the Lido v3 pre-deposit phase, which is unique to Mellow. Through us, they can tap into new on-chain yield opportunities. We also see L1s, L2s, and entire ecosystems launching their own vaults to offer high-yield products to their communities.
So curators range widely, but their core activities are similar: they attract capital to vaults, allocate it to strategies—like Lido staking, restaking on Symbiotic or EigenLayer, looping on Aave, or basis trading—and manage the associated risks to deliver solid, risk-adjusted returns to liquidity providers. If they succeed, LPs earn returns, and curators take a cut—creating sustainable and profitable business models.
How does Mellow Finance’s Automatic Liquidity Management (ALM) Toolkit optimize positions on automated market makers?
That’s an interesting part of our history. Mellow isn’t primarily focused on ALM anymore, but we were one of the early players in that space back in 2021. We developed vaults on top of Uniswap v3 to automate range management for concentrated liquidity. Today, our main focus is vault infrastructure, but our ALM toolkit is still actively integrated into Aerodrome and Velodrome—two of the leading DEXs on the SuperChain.
When users provide liquidity on Aerodrome, for example, they can delegate strategy management to our ALM toolkit. The toolkit automatically updates liquidity ranges to optimize returns and rewards in Aero tokens. So, it abstracts away a lot of the complexity for users and helps optimize yields.
In what ways does Mellow Finance integrate with various DeFi primitives and infrastructures to enhance user experience?
There are mainly two integration paths. First, curators who manage vaults need to allocate capital to generate yield, so they use DeFi yield primitives—like lending markets or DEXs—that are integrated into our infrastructure. If your protocol is integrated with Mellow, curators can allocate significant liquidity to it—sometimes hundreds of millions of dollars.
Second, every vault on Mellow issues a receipt token that LPs can hold in their wallet. These tokens can then be used in other DeFi protocols, such as lending markets, as collateral. A third integration path is coming soon. We’ve been working with LayerZero in stealth mode to roll out a cross-chain interoperability solution. This will allow us to deploy Mellow vaults across the EVM ecosystem, even connecting ecosystems like BTCFi with Ethereum-based yield strategies via LayerZero.
How does Mellow Finance address the challenges of liquidity fragmentation across DeFi protocols?
It’s important to recognize that in restaking, fragmentation is actually a feature—not a bug. For restaking to work properly, networks consuming economic security need a broad set of liquid restaking tokens. Each one should offer a unique risk profile managed by different curators, operators, and capital sources. If a network depends on just one vault, it’s too exposed to that single entity’s decisions.
Fragmentation ensures resiliency and diversification. However, for LPs, fragmented liquidity can be challenging in secondary markets. Most TVL in the liquid restaking space today is driven by leverage restaking via lending markets. To solve this, we’re building a middle aggregation layer—a kind of index of liquid restaking tokens—that will be heavily incentivized across DEXs and lending markets. This will abstract the complexity of individual vaults and help us scale up to compete with larger, monolithic platforms.
Since we’re already talking about the future, can you share Mellow’s broader roadmap for this year and next?
We pivoted to vault infrastructure about a year ago and started with restaking via Symbiotic. Soon, we’ll announce support for more restaking platforms accessible directly through Mellow Vaults. We also plan to expand to DeFi-native strategies like lending loops, basis trading, and stablecoin products. A key development is our integration of Lido v3, which is currently in the pre-deposit phase.
Once live, it will allow node operators to stake ETH via Mellow, mint stETH, and potentially restake or hedge it—offering structured products all within a single vault. This will make staking more lucrative and accessible for institutions. Beyond that, we’re pushing hard to achieve EVM compatibility and cross-chain deployment through LayerZero. So yes, we’ve got a lot of cooking.
Moving into more general topics for future articles—how are collaborations between DeFi platforms and traditional financial institutions shaping the future of decentralized finance?
Fintech apps and even some banks are becoming key access points for users entering DeFi. While power users will always value self-custody and full decentralization, the majority will come through apps that abstract away complexity. This “DeFi mullet” concept—where the front end is centralized but the back end is decentralized—is something I believe will dominate. At Mellow, we enable institutions to build sophisticated on-chain financial strategies inside vaults while keeping things user-friendly. That’s the key to bridging DeFi and TradFi.
How are regulatory developments impacting the growth and innovation of DeFi platforms globally?
With the new U.S. administration, there’s a clear signal that institutional adoption is coming. Today, we’re seeing two markets: the retail one, with NFTs, meme coins, etc.—which seems to be in a downturn—and the institutional one, which is booming. Events for institutions are packed. They’re interested but are waiting on regulatory clarity. Once that comes—say, with a stablecoin bill—we could see massive growth. Institutions are preparing to jump at the moment it’s feasible.
How is the integration of AI and blockchain expected to transform DeFi in the coming years?
It’s a fascinating area. There’s a natural synergy because DeFi generates so much on-chain data, which is great for training AI models. However, AI agents are still black boxes, and putting them fully on-chain raises questions of transparency and control. Still, I see a future where AI tools use DeFi rails to move and invest capital. Most people may never directly interact with blockchains—but their AI agents will. That could be the real mass adoption.
Disclaimer
In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.
About The Author
Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
More articles
Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
