[KBW2025] On-Chain Era Dawns as Pension Funds, Asset Managers Embrace Crypto Yields

At Korea Blockchain Week 2025, industry leaders predicted a rapid acceleration in institutional adoption of crypto yield strategies, as pension funds and major asset managers begin allocating 2% to 5% of portfolios to digital assets.

During a panel on institutional revenue management at the “KBW2025: IMPACT” conference in Seoul on Sept. 23, panelists said that traditional finance is entering an era where staking, decentralized finance (DeFi), and real-world asset (RWA) tokenization will be increasingly incorporated into regulated investment products.

From Staking to Structured Finance

Alessio Quaglini, co-founder and CEO of Hong Kong-based custody firm Hex Trust, outlined three main categories of on-chain returns: protocol rewards from staking; financial strategies such as basis arbitrage, lending, and DeFi farming; and tokenized yields from traditional assets like U.S. Treasuries or money market funds.

“The hallmark of blockchain finance is its ‘Lego-like’ structure,” Quaglini said, noting that investors can stack staking rewards, liquidity tokens, and collateralized loans to build complex strategies once only possible through investment banks.

Risk, Yield, and Institutional Guardrails

Luis Kim, CEO of crypto yield platform HappyBlock, warned that higher returns still come with higher risks or inflation exposure, though on-chain yields remain attractive in Korea given falling rates and inflation.

Kleos co-founder Giovanni Sanna said the market has shifted from chasing triple-digit annual returns in 2020 to pursuing sustainable, risk-adjusted strategies. “The landscape now blends traditional finance with native crypto mechanics,” he said.

Panelists emphasized that DeFi protocols must strengthen risk management frameworks—borrowing from traditional collateral models—and adopt custody, governance, and transparency standards to win institutional trust.

Tokenization Gains Traction

RWA tokenization was highlighted as one of the year’s most important trends. Kleos said it is already operating tokenized U.S. Treasuries within institutional-grade risk frameworks, while HappyBlock argued secondary markets for assets such as stablecoins will inevitably shift on-chain.

“Conservative investors are entering RWAs, but the big institutions are only beginning,” Sanna said. “The growth potential is enormous.”

Outlook: Convergence of TradFi, DeFi, and AI

Panelists agreed the infrastructure for institutional crypto adoption has matured rapidly, with banks and fund giants including Franklin Templeton and Fidelity setting governance standards. Central banks, financial institutions, and DeFi markets are expected to compete directly as regulated yield products expand.

Looking ahead, AI-driven strategies are expected to optimize protocols and push crypto yields into everyday use cases—blurring the line between traditional financial products and daily consumption.

KBW2025 in Focus

The two-day “KBW2025: IMPACT” event, hosted by FactBlock and co-organized by Bithumb, brings together regulators, blockchain firms, banks, and investors. This year’s theme, “Where Washington Meets Seoul, and Crypto Meets AI”, explores the intersection of regulation, tokenization, institutional finance, and artificial intelligence.

High-profile participants include U.S. presidential family members, the White House Digital Asset Committee, the Commodity Futures Trading Commission, and executives from Tether and Circle, alongside Korean lawmakers and commercial banks.