Supervised loans are a structured, risk-managed way to borrow a more productive asset against blue-chip collateral (e.g., BTC) and deploy the borrow into higher-yield strategies. For institutions sitting on large, low-yield crypto treasuries, supervised loans can (1) unlock carry without selling core holdings, (2) diversify yield sources beyond staking, and (3) plug into the fastest-growing parts of DeFi (restaking, RWAs, and stablecoin credit).

The timing is right. DeFi liquidity hit multi-year highs in Q3 (~$237B TVL), even as retail activity cooled—an unmistakable signal that institutional capital is driving the current cycle. Meanwhile, tokenized Treasuries and broader RWA markets have scaled meaningfully (>$5B in tokenized T-bills; >$24B RWAs ex-stablecoins), creating deep, relatively low-volatility venues for borrowed stablecoins to work.

What is a “supervised loan”?

A supervised loan is a multi-asset position where you:

1. Deposit blue-chip collateral (e.g., WBTC) in a lending market (Aave, Morpho, etc.).

2. Borrow a productive asset (typically stablecoin or ETH) at a lower rate than the expected secondary yield.

3. Deploy the borrowed asset into a secondary strategy (S2) that earns more than the borrow cost—e.g., onchain lending markets, restaking-adjacent vaults, or high-quality AMM pairs.

The aim is portfolio-level ROI on the entire collateral base that outperforms passive alternatives without sacrificing upside exposure to the blue-chip you posted.

Why this matters now:

• Blue-chip yield scarcity: WBTC supply APY on Aave v3 has hovered near zero (≈0.01% 30-day) for a large part of 2025. That’s capital sitting idle.

• Borrow costs are quantifiable and governable: Aave governance set target stablecoin borrow curves around ~6.5% this year—useful anchors for underwriting.

• S2 yields are competitive: Onchain lending fed by institutional flows are providing competitive returns, with APYs surpassing 10% through major DeFi platforms

Why supervised loans are a growth lever for institutional DeFi

Supervised loans fit institutional “carry + collateral” playbooks: clear funding costs versus strategy yield, deployed through assets like USD stablecoins and short-duration RWAs, and supported by mature rails such as tokenized Treasuries. With MiCA live in the EU and Basel’s crypto standard queued for 2026, DeFi participation through supervised loans is likely going to continue to expand in the coming months, driving broader DeFi growth.

Bottom line

Supervised loans are one of the most effective strategies for creating yield for low-yielding or idle blue chip assets. The current market conditions favour this strategy, offering solid and sustainable returns with a clear risk profile, making this strategy particularly interesting for institutions looking for yield while maintaining upside exposure for the underlying assets.

Sentora provides different solutions that utilize supervised lending strategies, combining them with advanced risk management and block-speed automation, ensuring the best risk reward profile. If you want to learn more, reach out to us here.