This follow-up is about the use case we think will define the next chapter of tokenized real estate: rentvesting, a way for renters to turn their monthly rent from an expense, into an investment.

Below we introduce rentvesting - what it is, why it matters, and how the Birch Hill RWA USDC Vault makes it work for the first time.

The Workflow at a Glance

DeFi infrastructure powering security-based lending markets.

• Supply side (permissioned at launch). At launch, accredited investors holding USDC can deposit into the Birch Hill RWA USDC Vault and earn yield by supplying liquidity to the Birch Hill Groma market. As mentioned above, participants in this market must complete accredited investor checks in addition to KYC checks, within their profile page on the Birch Hill front-end. Approved accredited investors’ wallets are screened for AML checks before deposits are enabled.

• Collateral side (permissioned). GromaCoin holders who KYC post GRO as collateral and borrow USDC against it. Loan-to-value, interest rate model, and liquidation parameters are set by Birch Hill, informed by traditional real estate credit underwriting. Our full underwriting methodology can be found at both our

  Vault Book

  and our client-login gated monitoring app.

• Infrastructure underneath. Birch Hill has deployed Morpho’s institutional-grade lending infrastructure to create our isolated GRO/USDC market. The Birch Hill RWA USDC Vault curates the USDC supply and manages allocation and rebalancing across Birch Hill markets, with Groma being the first market launched. In addition to deploying Morpho contracts, Birch Hill provides the risk engine, compliance layer, and institutional verification layer. Groma provides the asset, the NAV oracle (built by Chronicle with independent review of underlying NAV by Cushman & Wakefield), and quarterly redemption infrastructure.

Through the combination of best-in-class onchain lending infrastructure, RWA-specific oracle architecture, and offchain verification, we have built a market that lets real estate investors gain liquidity on their holdings in a capital efficient, compliance-focused manner.

Introducing Rentvesting

Rentvesting is the renter’s version of a mortgage. In the world we live in, where renting is cheaper than buying a starter home in most major metropolitan areas, many are faced with budget-based decision making preventing them from realizing a lifelong dream: homeownership. However, Groma offers a solution for the modern renter: the flexibility and cost savings of renting, with the upside value accrual of owning a home — inside an existing monthly rent budget, without a down payment, mortgage qualification, or concentration in a single property.

In partnership with the Groma team, Birch Hill is proud to introduce rentvesting to the onchain world.

The Problem

Anyone who has tried to buy a home in a major U.S. city over the last decade has met the same wall. Down payments have outpaced wage growth. Mortgage qualification is harder. Meanwhile, the people who already owned property, or who could afford to leverage into it early, have captured most of the appreciation.

Renters are not just paying rent. They are paying it while watching the asset class they are shut out of compound away from them. The traditional answer we have heard for years, “save up and buy when you can,” no longer works for most renters in Boston, New York, San Francisco, or Miami.

The Reframe

Improving the rent experience has been a market for innovation in the past: rent-to-own agreements with a landlord, Bilt’s credit card rewards program. However, Groma has taken a different direction. Instead of trying to buy the home you live in, you redirect your rent into ownership of a diversified portfolio of homes. Each rent check becomes equity in the GromaREIT, offering ownership of any property value increases. In other words, your assets go to work, making you a real estate investor, while you live in the city you want to live in.

How It Works

1. Redirect rent into ownership. Each month, the rentvestor sends their rent payment into the program, where it purchases GromaREIT shares in their name. (Their rent still gets paid — see step 2.)

2. Borrow against shares. The program then lends the rentvestor dollars against those shares, and those dollars pay the rent to the property like normal. The result is an equity stake acquired and rent paid. Groma facilitates this borrowing and, under the current program design, posts additional collateral of its own to support the initial 1:1 borrowing level.

3. Hold the shares. The rentvestor keeps the GromaREIT shares for as long or as short as they want. They forgo the share’s dividend stream — those dividends stay with Groma to service the cost of financing the covered rent.

4. Sell when ready. On sale, the share proceeds first repay Groma for the rent it covered on the rentvestor’s behalf; any value above that is the rentvestor’s to keep.

5. Downside is designed to sit with Groma. If the shares are worth less than the rent Groma covered, the program is structured so Groma absorbs the shortfall with no clawback and no recourse to the renter. If dividends don’t fully cover financing costs, that gap is Groma’s to carry too. The goal is that a renter should never end up worse off than if they had simply paid rent. The program works for Groma by creating an onchain continuous new capital raise as rent becomes both investment and payment, aligns renter and investor incentives for the first time, and scales the Groma ecosystem in terms of people, properties, and capital.

The shape is familiar to anyone who has ever taken a mortgage: convert monthly housing payments into equity in real estate. The difference is there is no down payment, no qualification gate, no concentration in a single property, and a downside-protected payout on exit.

A Worked Example

A renter in Boston pays $2,500/month — $30,000 a year — in rent.

• Monthly. The rentvestor’s $2,500 buys $2,500 of GromaREIT shares. Separately, those shares are used as collateral to lend the renter $2,500 from the financing facility to pay their rent. That $2,500 is paid to the property like normal.

• After a year. The renter has accumulated $30,000 of GromaREIT shares. $30,000 of capital has been borrowed against those shares (and additional collateral posted by GromaCorp as needed) to cover $30,000 of actual rent.

• If GRO appreciates 5%. The accumulated shares are worth roughly $30,806 on sale. Groma is repaid the $30,000 it covered in rent, and the renter keeps about $806 of appreciation. (It’s not $1,500 because while it’s 5% over a year, it’s invested monthly, not all upfront. This distinction matters less in later years.)

• If GRO is flat or down. Groma absorbs the shortfall. The renter is whole — no clawback, no recourse. Groma reserves cash against this for further downside protection.

• No gate. No mortgage qualification, no 20% down, no single-building bet.

This is what we mean by rentvesting: the renter’s version of a mortgage, made viable because Groma can finance the rent payments at scale.

Where the Vault Comes In

Rentvesting needs a financing pipeline. Our vault acts as that pipeline, with distinct advantages over traditional real estate credit in both our cost of capital and our ability to scale together.

Conventional financing means bespoke negotiations at every stage of growth. Onchain financing offers frictionless access to capital that programmatically scales as Groma’s balance sheet (and borrowing capacity) grows, without ever needing to renegotiate terms from scratch. It also offers a lower-friction path to borrowing against the REIT itself — traditional routes can get you there, but without the programmatic access and transparency the vault provides.

Additionally, we believe that vault rates are structurally advantaged. As yield continues to be a driving force across crypto, stablecoin issuers and holders alike are looking towards diversified, credit-worthy real-world sources. That global, competitive demand offers deep liquidity that is ultimately accretive to Groma, recognized in a cost of capital that traditional financing cannot match.

That is the role of the Birch Hill RWA USDC Vault. GromaCorp borrows USDC against its real estate balance sheet at programmatic, transparent rates. As the partnership scales, supply deepens, and borrow rates compress, expanding Groma’s ability to grow the REIT and its yield.

Our vault is the credit rail powering rentvesting.

Why This Matters

The traditional gating mechanism for real estate participation, homeownership, is breaking. A growing share of the population will rent through their prime earning years not because they want to, but because the math no longer works. This has all kinds of downsides which are becoming more and more visible in renter heavy cities like NYC, Boston, and LA. When more than half of the population is excluded from the system, they have no incentive to reform the system, but rather seek to extract value from it in ways that are proven time-and-time again to be long-term destructive. Even if you already own a home personally, you still want rentvesting to work because cities, systems, work better when everyone can own a part of them.

What’s missing to achieve this is not capital, but modern financial infrastructure. Renters need a way to:

• Get diversified, professional real estate exposure without a down payment or a single-property bet

• Participate in appreciation with downside protection

• Do it inside their existing monthly rent budget

Groma’s rentvesting program provides the solution. The Birch Hill vault gives Groma the financing rail. Together, they make the first viable onchain rentvesting stack possible — with the same compliance, risk management, and reporting infrastructure that institutional credit markets require.

What’s Next

Rentvesting is in internal alpha at Groma now, with a public launch planned for next year. The Birch Hill vault is live now.

If you are a renter who has been priced out of the asset class, a stablecoin holder looking for real-asset-backed yield, or an institution evaluating tokenized real estate credit, reach out to us at info@birchhill.io or directly to the @GromaCorp team at groma.com.

The best version of onchain finance is not a replacement for traditional capital markets. It is a better implementation of them. Rentvesting is one of the clearest examples we’ve seen of what that looks like in practice.

Disclaimer: This post reflects Birch Hill’s internal view as of July 23, 2026. It is for informational purposes only, is not investment, legal, tax, or accounting advice, and does not constitute an offer to sell or a solicitation of an offer to buy any security, token, or investment product. Any such offer will be made only to verified accredited investors through official Birch Hill channels and definitive documentation. Access to the Birch Hill platform is permissioned and subject to identity verification, accredited investor verification, wallet screening, and ongoing monitoring; nothing here should be read as a guarantee of eligibility, access, or terms.

Rentvesting is a program of GromaCorp, not Birch Hill. It is in internal alpha; its structure, terms, and availability are subject to change, and there is no assurance it will launch as described or at all. Birch Hill does not offer, administer, or guarantee the rentvesting program. Any downside protection described is a contractual obligation of GromaCorp, subject to its ability to perform, and is not a guarantee, insurance, or deposit protection. GromaREIT shares are securities subject to their own risks, including real estate market risk, NAV-based valuation, limited redemption windows, and illiquidity. The worked example above is hypothetical and for illustration only; it is simplified, assumes program terms that are not final, and is not a projection or guarantee of results.

Onchain products carry material risks, including smart contract, liquidation, collateral, liquidity, redemption, oracle, and counterparty risk, as well as the risk of total loss. Digital assets and tokenized securities are volatile and may be illiquid. Yields and borrow rates are variable and not guaranteed; statements about relative cost of capital or rate advantages are opinions and forward-looking. Past performance is not indicative of future results.

Statements regarding future plans, features, or products are forward-looking and subject to change. References to third parties, including Morpho, Groma, Yearn, Persona, VerifyInvestor, TRM, Hypernative, Chronicle, and Cushman & Wakefield, are for identification only and do not imply endorsement; Birch Hill is not responsible for their services. Third-party data is sourced from external providers and is current as of the publication date. Regulatory references are not legal advice. Birch Hill is pre-registration as of this date.

We have spent our careers on both sides of this market, first in institutional credit at Goldman Sachs and BlackRock, then five years deep in onchain markets. Through this launch, we are bringing both sides together, powering hard-asset financing with onchain rails.

Last month we published why we believe asset-backed credit is the market onchain finance is built for. This post covers what we shipped and exactly how to access the Birch Hill platform.

What Is Live

The Birch Hill platform is live at birchhill.io with our first curated market, the Birch Hill RWA USDC Vault on Base, built on Morpho’s lending infrastructure and the Yearn v3 vault standard.

The vault lends USDC into a permissioned market collateralized by GRO, which represents tokenized ownership in the GromaREIT, a private multifamily REIT targeting premier urban core residential markets across the Northeast.

Built on Morpho

Our stack is powered by Morpho’s institutional-grade lending infrastructure which underpins onchain credit programs for some of the largest fintech companies in the world.

Morpho markets are isolated, each one pairs a single collateral asset with a single loan asset, and its core market parameters are ossified at deployment.

Nothing about the GRO/USDC market can be quietly changed later. The market is immutable. Exogenous events occurring in other markets cannot spill into ours.

On top of our Morpho stack sits our Birch Hill RWA USDC Vault, which leverages Yearn’s v3 vault infrastructure. Birch Hill curates the USDC into RWA opportunities on Base that meet our underwriting criteria, starting with GRO.

Behind that curation sits the credit underwriting, the risk engine, and the compliance stack that gates access to every strategy. To complete the infrastructure stack, Groma brings the asset, the quarterly redemption process, and the NAV oracle, built by Chronicle with independent review of the underlying NAV by Cushman & Wakefield.

Full strategy and risk documentation is public in our Vault Book.

Why Access Is Permissioned

The largest credit markets in the world barely exist onchain. Real estate is the clearest example.

The reason is not the technology. The reason is that the two sides could not meet. Institutional lenders will not supply into anonymous pools. Real-world borrowers cannot post their assets into markets that ignore securities law.

GRO is equity in a REIT. Lending against an asset like that carries real obligations, so we built the checks into the platform rather than around it. We verify identity through Persona. We verify accredited investor status through VerifyInvestor, an independent third party, with attorney review. We screen every connected wallet through TRM before deposits are enabled, and we keep monitoring after. Both sides of the market pass these checks, the investors supplying USDC and the GRO holders borrowing against it.

Permissioning is not a limitation on the product. It is the reason the product can exist.

How Onboarding Works

The full walkthrough, with screenshots of every step, is in our onboarding guide.

1. Connect and verify - Start at birchhill.io/strategies and select Get Access on the Birch Hill RWA USDC strategy. Sign in with Google to create your platform profile, then clear the Persona identity check.

2. Verify accreditation - Birch Hill routes you to VerifyInvestor. Users confirm the exact legal name that will hold the position. Then certify by whichever method fits: income, net worth, or professional credential for individuals; the $5M asset test for most entities; a recent certification letter for trusts. Submission takes a few minutes. Attorney review typically clears within 24 hours, and you can browse public strategies while accreditation is pending.

3. Explore strategies - Once verified, users can view strategies, the Vault Explorer where supply actions live, and a Market Explorer listing individual markets, including the GRO/USDC market used by borrowers.

4. Connect your wallet, then supply or borrow - The wallet you connect becomes your primary wallet. It is screened by TRM before deposits are enabled and cannot be changed later, so hardware wallet and multisig setups should connect the signer they will use going forward. Lenders deposit USDC into the vault and receive shares representing their pro-rata claim. Borrowers post GRO in the GRO/USDC market and draw USDC, seeing current and liquidation loan-to-value, health factor, and estimated borrow cost before signing. Dividends on collateralized GRO continue to accrue to the borrower.

5. Manage your position - Repay in part or in full at any time. Add collateral. Withdraw as your health factor allows. Monitor the position throughout. Institutional participants will soon access the same data via API, with an analytics dashboard offering accounting-grade exports and financial reporting.

What We Are Building with Groma

Our first market is a partnership with GromaCorp. Groma has spent years tokenizing multifamily real estate and building the operations behind GRO: technology-first property management, audited NAV attestation, a reliable redemption process, and the property-level reporting investors need to trust the asset.

What Groma needed was a modern-day credit rail: frictionless, transparent liquidity at programmatic rates. That is what the Birch Hill vault provides.

The use case we are most excited about is rentvesting, the renter’s version of a mortgage. Rent payments become equity in a diversified real estate portfolio. Groma finances the rent. The renter keeps the appreciation, and Groma absorbs the downside.

Rentvesting is in internal alpha at Groma today, with a public launch planned for next year. Later this week we will publish a full piece on how it works and the role our vault plays as its financing pipeline.

Where This Goes

Our vault and market stack are live and in controlled rollout. As the partnership scales and supply deepens, Groma’s capacity to grow the REIT expands, giving depositors yield backed by real assets, real underwriting, and real controls.

This is the model we intend to repeat, one asset partner at a time, one isolated market at a time, each with the same compliance, underwriting, and monitoring that institutional credit requires.

If you are an accredited investor or allocator looking for real-asset-backed yield, start onboarding here. For questions on access or verification, please reach out to the team at info@birchhill.io.

Disclaimer: This post reflects Birch Hill’s internal view as of July 22, 2026. It is for informational purposes only, is not investment, legal, tax, or accounting advice, and does not constitute an offer to sell or a solicitation of an offer to buy any security, token, or investment product. Any such offer will be made only to verified accredited investors through official Birch Hill channels and definitive documentation. Access to the Birch Hill platform and its strategies is permissioned and subject to identity verification, accredited investor verification, wallet screening, and ongoing monitoring; nothing here should be read as a guarantee of eligibility, access, or terms.

Onchain products carry material risks, including smart contract, liquidation, collateral, liquidity, redemption, oracle, and counterparty risk, as well as the risk of total loss. Digital assets and tokenized securities are volatile and may be illiquid. Yields and borrow rates are variable and not guaranteed. Past performance is not indicative of future results, and projected or targeted returns may not be achieved.

Statements regarding future plans, features, or products, including rentvesting, API access, analytics tooling, and additional markets, are forward-looking and subject to change; there is no assurance they will launch as described or at all. References to third parties, including Morpho, Groma, Persona, VerifyInvestor, TRM, Hypernative, Chronicle, and Cushman & Wakefield, are for identification only and do not imply endorsement; Birch Hill is not responsible for their services, and their inclusion does not constitute a guarantee of performance, security, or compliance. All third-party data is sourced from external providers and is current as of the publication date. Regulatory references describe public legislation and rulemaking and are not legal advice. Birch Hill is pre-registration as of this date.

It is impossible to talk about onchain credit without separating the three things people call by that name.

The first is overcollateralized crypto lending. Aave, Morpho, Compound, Spark. A borrower posts $1.50 of ETH to draw $1.00 of stablecoin. Liquidation is mechanical. The collateral is liquid 24/7. The category has matured into one of the most reliable yield primitives in DeFi, with stablecoin supply rates today sitting in the 3.5% to 7% range. This works. It also does not scale beyond crypto-collateralized risk.

The second is uncollateralized lending. This has been the holy grail of DeFi since 2017 and has consistently failed in its permissive forms, because the protocol layer cannot answer the three questions any credit business actually has to answer: who is the borrower, how do you price their default, and what happens when they don’t pay. The history of this category thus far is a graveyard.

The third is asset-backed credit. Loans against real, identifiable collateral, with offchain legal claims, third-party assessment, and recovery rights. This is the category that’s growing fastest. It is also the only category with a credible answer to the adverse selection problem that has killed every previous attempt at credit onchain.

“Asset-backed credit” as a label is already growing onchain, mostly as a wrapper. Today’s onchain ABC is largely tokenized fund interests: a fund holds the loans, the tokens represent shares in the fund, and the structure of the fund determines whether the adverse selection problem actually gets solved. In most cases, the protocol layer just passes through whatever risk the fund sponsor built in.

ABC is the fastest-growing onchain credit category, but the way it’s growing today, wrapped in tokenized funds, does not actually solve the problem. The fund wrapper inherits the structure of whoever sponsored it. What we’re implementing is the solution at the smart contract layer: assessment, structure, and recovery encoded into the vault itself, not inherited from a fund manager offchain.

Where the Growth Actually Is

The onchain real-world asset category, RWAs across all sub-segments, has gone from $5.6B at the start of 2024 to $25.96B as of June 3, 2026. That is a ~4.6x expansion in 29 months, almost all of it concentrated in the last twelve. The pullback off the May peak is small relative to the trajectory and consistent with normal category volatility.

It is worth putting that growth in context. Even after a 4.6x expansion in 29 months, the entire onchain RWA market today is a rounding error against what the market believes the category can become. Deloitte’s April 2025 forecast projects $4 trillion of tokenized real estate alone by 2035, with tokenized loans and securitizations representing the single largest subsegment at $2.39 trillion.

The composition matters more than the headline. The first wave was tokenized U.S. Treasuries: BlackRock’s BUIDL, Franklin Templeton’s BENJI, Ondo, Superstate, and now JPMorgan’s MONY and BNY Mellon’s competing products. These are essentially money-market funds with a blockchain wrapper. They proved that institutions can and will custody onchain, but they did not solve a credit problem. They simply ported an existing product.

The second wave, the one we’re in, is tokenized private credit. Onchain private credit has grown ~180% year-over-year and is now the largest non-stablecoin RWA sector. Maple Finance has $3.17B in its USDC lending vault and ~$926M in its USDT vault, roughly $4.1B in stablecoin deposits across the two. Centrifuge has passed $1.38B in TVL. New entrants keep coming, including Centrifuge’s USDS vault at ~$865M.

These are credit funds with onchain plumbing. The borrowers are KYC’d, the loans carry offchain legal documentation, third-party assessment is done by humans with credit committees, and recovery happens in court like every other private-credit fund. What blockchains contribute is the distribution, the transparency of the wrapper, and increasingly the regulatory containment layer.

Stablecoins are the demand side, and they are growing even faster.

Total stablecoin supply has reached roughly $323B today. USDT is around $190B across chains. USDC is ~$73B. The other yield-bearing and crypto-backed stables (USDS, DAI, USDe, etc.) add another ~$65B. The aggregate float looking for compliant onchain yield is, by our read, well north of $250B and growing at high single-digit percent per month. The question is no longer whether there’s onchain capital that wants yield. The question is what that capital is allowed to do.

What Asset-Backed Credit Actually Is, and Why It Works

When we say asset-backed credit, we mean something specific. A loan is asset-backed when (a) the borrower pledges identifiable real-world collateral, (b) the lender holds a perfected security interest in that collateral, (c) recovery does not require the borrower’s cooperation, and (d) the loan-to-value, term structure, and recovery waterfall are documented in legal instruments that survive default. In traditional private credit, this is unremarkable. In onchain credit, it is the single feature that separates a working structure from a failed one.

The collateral types that work in ABC are the ones with three properties: they are identifiable (not commingled), they have an active secondary market for liquidation, and the lien process is well-understood in the jurisdiction of the borrower. Examples: trade receivables, equipment finance, real-estate-backed bridge loans, invoice factoring, structured consumer finance. Examples that do not work, or work only at much wider spreads: future cash flows of operating businesses without specific asset pledge, intangible IP, illiquid private equity stakes. The discipline is collateral first, borrower second.

Real-estate-backed lending is worth a moment of focus, because it is the single largest projected segment of the entire tokenization opportunity. Deloitte’s breakdown is unambiguous on this point: by 2035, tokenized loans and securitizations are projected to dominate the tokenized real estate mix, at roughly three times the size of tokenized private real estate funds and dwarfing tokenized equity in undeveloped or under-construction projects.

What earns the spread is the work done before deployment. Each loan goes through a credit assessment that prices the probability of default, the loss given default, and the recovery process. Each loan is documented with covenants, reporting obligations, and trigger events. Each pool has a curator or assessment partner with reputational and financial skin in the game. Each vault has a defined waterfall: who gets paid first when assets are liquidated, what triggers a pool freeze, how losses are allocated. The mechanism is doing the work; the marketing is doing nothing.

This is also why the spread persists. As tokenized T-bills cluster at ~3.5%, and overcollateralized DeFi clusters between 2.5% and 4.2%, well-structured ABC pools sit consistently in the 4-5% range with multi-billion-dollar capacity. That premium is compensation for credit work an expert must complete. The protocol layer doesn't do that work, it is built so outside experts can curate it.

The Adverse Selection Problem, and Why Most Onchain Credit Hasn’t Solved It

Anyone who has worked in private credit knows the borrower self-selecting into your product tells you almost everything. The cheapest capital goes to the strongest borrowers. The credit you ultimately get is the credit that was rejected by everyone earlier in the stack. This is the adverse selection problem, and it is the only problem in private credit that actually matters.

Onchain credit, in its permissive forms, has historically inverted the solution to this problem. Early protocols extended capital to pseudonymous wallets willing to pay the highest rate. No identity. No recourse. No assessment layer beyond pool stats. The 2022 stress period made the consequences obvious: pools that had marketed themselves as “institutional-grade” discovered their borrowers were correlated, undisclosed, and in some cases insolvent. Recovery on defaulted loans was effectively zero because the loans were unsecured and the jurisdictions unclear.

The version that works, permissioned pools with KYC, offchain documentation, dedicated curators, and a real assessment layer, is now the dominant structure of the surviving onchain credit market. The onchain market leaders have all converged on essentially the same answer: the credit work happens offchain, the pool encodes the result. That is a meaningful improvement on permissionless undercollateralized lending. It is not the end of the design space.

Here is the key point that today’s market has not internalized: when ABC sits inside a fund wrapper and the fund determines underwriting, recovery, and waterfall, the adverse selection problem moves up one level. If the fund manager has incentive misalignment, leverage exposure, or inadequate assessment, the onchain vault is just a more transparent way to deliver bad risk.

The Regulatory Inflection: GENIUS, CLARITY, and the Yield Question

If the market structure is the first leg of why we are building now, U.S. regulation is the second, and it has moved in the last twelve months in a way most operators are still catching up to.

The GENIUS Act, the first federal stablecoin framework, was signed into law on July 18, 2025. It established a federal regime for payment stablecoin issuers, required 1:1 reserves, and, critically for our thesis, prohibited stablecoin issuers from paying any form of interest or yield directly to holders. The OCC issued its proposed implementing rulemaking on February 25, 2026. The statutory deadline for final regulations is July 18, 2026. The full operational regime is expected to be in place by January 2027 at the latest.

The GENIUS Act left one loophole: it banned issuer-paid yield but didn’t fully address yield paid by exchanges or affiliated platforms on stablecoin balances. The Digital Asset Market CLARITY Act, currently moving through the Senate after passing the House, closes that gap. The latest draft prohibits offering yield directly or indirectly on stablecoin balances. The White House’s April 2026 paper, “Effects of Stablecoin Yield Prohibition on Bank Lending,” makes the policy logic clear: Washington wants stablecoins to be a payments rail, not a deposit substitute, and it wants yield to flow through clearly demarcated investment products rather than through the stablecoin itself.

This is the regulatory window most of the market is mispricing. The set of products that can legally deliver yield to onchain dollars is being explicitly narrowed. The set of structures that survive (registered funds, properly disclosed lending vaults, tokenized credit products) is being implicitly elevated. The next twelve months will be a sorting event.

The Vault Is the Architecture That Matters

If stablecoin issuers cannot pay yield, and exchanges cannot pay yield on stablecoin balances, then the only legitimate way to convert onchain dollars into income is through a discrete, identifiable investment product. Onchain, that product is a vault. ERC-4626 and its successors have become the de facto standard for tokenized yield-bearing positions, and the vault is now the chassis for almost every compliant onchain credit product in the U.S. market.

In traditional asset-backed lending, the wrapper is incidental. You raise an LP commitment, draw down into a fund, deploy into loans, distribute.

Onchain, the vault is doing far more work than its TradFi equivalent. The vault is, simultaneously, the issuance mechanism (it mints shares representing claims on the underlying loans), the disclosure mechanism (its accounting is publicly verifiable), the distribution mechanism (anyone with a wallet can interact subject to permissioning), the recovery mechanism (waterfalls and trigger events are encoded), and increasingly the regulatory containment vessel (permissioning can enforce KYC, accredited-investor gates, and jurisdictional restrictions in ways a stablecoin cannot). When yield is prohibited at the stablecoin layer, the vault layer becomes the place where compliant, regulated, transparent yield gets delivered.

This is why we believe the design of the onchain vault, its permissioning, its accounting, its disclosure standards, its compliance posture, and most importantly the way it encodes credit work, becomes the single most important architectural choice in this market over the next eighteen months. In traditional ABC, you can have a mediocre fund wrapper and great credit work and still produce a great product. Onchain, in the post-GENIUS/CLARITY world, a poorly designed vault becomes a regulatory liability. A vault that simply tokenizes a fund interest relocates the adverse selection problem instead of solving it.

Where We Stand

We focus on asset-backed credit because it is the only onchain credit category with a structurally defensible answer to adverse selection, and because the data is unambiguous about the demand side.

We orient toward the United States with a compliance-first posture because we believe the U.S. regulatory framework, post-GENIUS and post-CLARITY, will define the global standard for how onchain yield is delivered. The cost of retrofitting compliance onto a non-compliant structure is far greater than the cost of designing it in from day one.

We treat the vault layer as a first-order design problem, not a packaging exercise, because we believe the architecture is where the next eighteen months of regulatory, technical, and operational complexity will compound. We are not interested in being another tokenized fund interest. We are interested in encoding assessment, structure, and recovery into the vault itself, at the protocol layer, in a way that the current generation of products does not.

The Next Twelve Months

By July 2026, the OCC’s final GENIUS Act rules will be in place. By the end of 2026, the CLARITY Act framework will likely be enacted or close to it. By January 2027, the full payment stablecoin regime will be operational. Somewhere in that window, a generation of yield-bearing products designed for the pre-2025 regulatory environment will need to retire, and a generation of products designed for the post-CLARITY environment will need to be ready.

The onchain capital base is there. Stablecoin float has reached ~$323B. Onchain credit demand is growing at triple-digit rates. The regulatory framework is being finalized and, with appropriate caveats, pointing in a direction that favors well-structured, compliant, U.S.-domiciled, vault-based asset-backed credit.

We see a rare alignment of market timing, regulation, and capital formation. Birch Hill is building for it.

Disclaimer: This note reflects Birch Hill's house view as of June 3, 2026. It is not investment advice and does not constitute an offer to sell or a solicitation of an offer to buy any security or investment product. Regulatory references describe public legislation and rulemaking and are not legal advice. All third-party data is sourced from publicly available analytics platforms, including DefiLlama, and is current as of the publication date. Past performance is not indicative of future results. Birch Hill is pre-registration as of this date.

The market enables holders of GromaCoin (GRO), a tokenized share in the Groma Real Estate Trust, a multifamily apartment REIT with over $150 million in ecosystem value, to borrow stablecoins against their tokens through institutional-grade infrastructure. Lenders deposit USDC into a Birch Hill vault built leveraging Yearn and Morpho’s infrastructure, earning yield from borrowers posting real estate-backed collateral.

This is the first time tokenized REIT equity has been used as collateral in a programmatic, whitelisted onchain lending market with institutional risk management and onchain controls. It represents what we believe is the natural next step for real world assets: moving from static tokenization to composable, productive capital.

Source: Groma

Why Now? Tokenized real world assets have crossed $16 billion in onchain value globally (DeFiLlama), but most tokenized real estate today sits idle, held in static digital wallets. There is not enough diversity to put assets to work at scale for institutional holders.

Birch Hill’s partnership with Groma changes the equation. By combining Groma’s vertically integrated real estate platform and Birch Hill’s risk management and compliance layers, we are creating the first real estate equity lending market that couples verifiable onchain custody and offchain yield generation. The implications extend beyond a single vault. When tokenized REIT equity can serve as reliable lending collateral, thanks to transparent NAV reporting, programmatic risk parameters, and institutional liquidity infrastructure, it sets the stage to expand tokenized equity lending markets for structured real estate broadly.

What is Groma? Groma is a vertically integrated real estate company that owns and operates multifamily apartment properties, primarily small to mid-sized buildings in dense urban cores. The company has built proprietary technology, including an AI property manager called “Grobot”, to efficiently acquire, renovate, and manage Groma assets, opening up a historically overlooked $2T+ asset class to institutional investors.

GromaCoin is a tokenized share in the Groma Real Estate Trust, a Maryland corporation structured as a NAV REIT. As of Q4 2025, the trust reported a net asset value of $1.05 per token with an aggregate NAV of approximately $68 million across nearly 65 million tokens outstanding. The trust targets a total 8-12% yield profile, composed of 4–5% annual dividends and 4–7% appreciation. What makes Groma distinct in the tokenized asset landscape is asset-level ownership: Groma actually owns the real estate. The tokens are not synthetic exposure or wrapped ETF shares; they represent equity in a portfolio of physical apartment buildings with real tenants, real cash flows, and real operating history.

Source: Groma

How the Vault Works - The architecture utilizes four protocols and platforms, each responsible for a distinct function in the capital stack. Morpho provides the base lending protocol, a set of immutable smart contracts that define how collateral is posted, how loans are issued, and how liquidations are triggered. Morpho’s isolated market design means the Birch Hill X GRO lending market operates independently from other Morpho markets, with its own risk parameters and access controls.

Yearn Finance curates the USDC vault that supplies liquidity to the Groma market. Yearn’s role is capital allocation: directing depositor USDC into the Morpho market based on risk-adjusted yield, managing rebalancing, and providing the vault frontend. Yearn’s involvement signals that this market meets the risk and return standards of one of DeFi’s most established yield protocols.

Source: Birch Hill

Institutional Access Layer - Birch Hill provides the risk management, compliance, and institutional access layer. Birch Hill’s risk engine applies a collateral scoring framework, adapted from traditional real estate credit underwriting, to both establish proper risk metrics for the Groma market and create proper institutional liquidation infrastructure. Additionally, Birch Hill provides clients with institutional-grade analytics to meet both accounting and financial reporting requirements.

Groma provides the collateral asset itself, GromaCoin (GRO), along with the underlying real estate assets, operational management, data,, NAV reporting, and distribution infrastructure. Groma’s quarterly NAV process, including independent review quarterly by Cushman & Wakefield, provides the fundamental valuation anchor for the oracle price feed.

Open Liquidity, Permissioned Collateral - This market is deliberately asymmetric in its access model. The supply side, depositing USDC to earn yield, is open. Any stablecoin holder can provide liquidity to the vault without KYC, the same way any lender can participate in an existing peer-to-pool onchain market. This open supply side is critical: it allows the market to attract deep stablecoin liquidity from across the ecosystem, driving borrowing rates down over time as supply scales.

The collateral side is permissioned. Borrowers must hold GromaCoin acquired through compliant offerings (currently available to accredited and non-accredited investors in the US and elsewhere)) and are verified through Persona KYC before being allow-listed to post collateral. This ensures that every borrower in the market is a known, compliant holder of a regulated security.

This hybrid architecture–open liquidity, permissioned collateral–is the design that makes institutional real estate lending composable onchain. It preserves the capital efficiency and rate discovery of DeFi lending while enforcing the compliance controls that the underlying asset requires. Institutional capital gets regulatory clarity on the borrower side; stablecoin holders get transparent, real estate-backed yield on the supply side.

Source: Birch Hill

Phased Rollout - The partnership is rolling out in three phases. In Phase 1, launching in Q2 2026, Birch Hill deploys the initial Morpho market on Base with GromaCoin collateral and USDC lending. Yearn curates the USDC vault and manages allocation. GromaCorp engages as the first borrower, and Birch Hill sets the initial risk parameters, including interest rate model and loan-to-value limits.

Institutional Liquidity & Risk Infrastructure - One of the most critical questions in any real estate-collateralized lending market is: what happens if the borrower defaults? For tokenized real estate, this question is harder than it is for liquid crypto assets because there is no deep order book to sell into.

Birch Hill has assembled a multi-layered liquidation infrastructure to address this. Near-term, institutional partners such as institutional market makers provide dedicated liquidation capacity for the pilot. These are not automated bots; they are institutional counterparties with the balance sheet and mandate to absorb GromaCoin collateral at a discount and hold or redeem through Groma’s quarterly NAV process.

Longer term, Birch Hill is evaluating protocol-level RWA liquidation solutions to scale liquidation infrastructure as the market grows. The goal is a layered system: institutional liquidators for large positions and programmatic solutions for routine operations. Groma’s own redemption infrastructure provides a fundamental floor. The trust honors quarterly redemptions at NAV with a 10% quarterly capacity, and historical redemption rates have been under 1%, –a positive signal for collateral stability. While real estate values fluctuate, they have intrinsic underlying value, allowing for a deeper pool of buyers at a smaller discount than may be the case for non-asset-backed tokens.

The Birch Hill Platform - Groma is the first deployment in what Birch Hill is building as a broader tokenized credit platform. The thesis is straightforward: real world assets need real world credit infrastructure, and the onchain capital markets stack–lending protocols, vault curation, risk engines, and compliance tooling–is now mature enough to deliver institutional quality.

Proving out that onchain infrastructure today can support a REIT as lending collateral with transparent risk management and institutional liquidation will allow us to expand the asset universe tomorrow. Birch Hill is the infrastructure and risk management layer in this stack, and our work with Groma is that proof of concept.

Source: Birch Hill

Looking Ahead - This partnership is in active build and integration. The technical workstreams, oracle integration for onchain NAV reporting, dividend distribution mechanics for tokens posted as collateral, and smart contract deployment are being finalized by engineering teams at Birch Hill and Groma.

We expect to share more detail on market parameters and vault details as the deployment progresses. For Birch Hill, this is the beginning of a new asset class in onchain credit. For Groma, it is the next step in making real estate composable.

We believe the best version of onchain finance is not a replacement for traditional capital markets, but a better implementation of them. Transparent risk parameters. Programmable compliance. Real assets. This is a first public implementation of what that looks like in practice.

Credit is the backbone of the global financial system. It is how companies fund growth, how real estate gets built, how infrastructure gets financed. It is a $300+ trillion market and it is already moving onchain.

This adoption is not because blockchain is novel, but because it is better. Blockchains and the capital market stack built on its rail offer: (1) Real-time settlement, (2) Programmable risk parameters, (3) Transparent collateral, and (4) Immutable audit trails. The efficiency gains are not theoretical. They are structural.

Yet, with all the progress this industry has made since the earliest days of DeFi Summer, our goal of institutional adoption has not yet been achieved. Simply put, institutional capital has not shown up.

They see the opportunity onchain, but the infrastructure is not built for them. Most of what exists today was designed and optimized for crypto-native users chasing yield. That works for the earliest adopters of a nascent technology, but it does not scale to a pension fund, an RIA, or a family office with fiduciary obligations and compliance requirements. That infrastructure does not exist within a vertically-integrated, institutional-grade stack. This is what we set out to build.

Birch Hill is an institutional credit infrastructure company, designed to bridge the gaps that separate TradFi capital and onchain efficiency. We curate lending strategies through an institutional-grade risk and compliance engine that prioritizes capital preservation over yield chasing.

We are not aggregating DeFi yields. We are building the underwriting discipline, risk monitoring, and governance frameworks that let institutions actually participate in onchain credit markets.

Since closing our round, we have onboarded as a new institutionally focused curator on Morpho, with plans to launch our first vaults in Q1 and expand to additional platforms thereafter.

Regardless of chain, protocol or strategy, our process remains the same. Our Collateral Risk Framework provides real-time monitoring of collateral quality, liquidity conditions, and pricing integrity - paired with auditable decision trails for regulatory and client reporting. This is about building financial infrastructure that works for the largest pools of capital in the world. The capital will follow when the infrastructure meets them where they are.

Our team has spent years on both sides. Bhavin originated structured credit at Goldman Sachs and invested at Cerberus before transitioning to digital assets at 10T Holdings. Jack and Connor built risk systems on BlackRock’s Aladdin platform, infrastructure managing over $10 trillion, before researching onchain lending protocols at what is now Birch Hill Labs.

We have seen how institutional capital moves. We have seen what is missing onchain. Birch Hill is the bridge. To everyone who backed us early to get here today, thank you. We are just getting started.

Bhavin, Jack, and Connor

Press Coverage:

The Block - link

BusinessWire - link

On The Brink Podcast:

That world is reaching its ceiling. Thus, the success condition for digital asset technology is not growing the crypto-native population; it is enabling adoption at scale, where blockchains become invisible plumbing rather than a product. Crypto as a siloed industry must give way to digital assets as embedded infrastructure. True adoption means institutions and their customers are using blockchain without ever knowing it.

Birch Hill Strategy For 2026

To align with this shift, we are refocusing our roadmap around our core strengths. We will no longer be launching the Benchmark protocol on MegaETH. We believe that wrapping existing DeFi primitives is not where we create the most value. Rather, we are focusing our energy where the enduring, massive wins reside: embedding into the real world economy.

Today, we are formally introducing Birch Hill Solutions. Our mission is focused on serving institutional clients across an increasingly complex multi-chain landscape. We are taking a unique approach, focusing our efforts on mid-size traditional financial institutions and non crypto public companies, the “middle” of global finance that, in our view, has been largely ignored.

The Bridge to Onchain Finance

Birch Hill Solutions acts as the bridge to bring these entities onchain. We help them navigate:

• Complex Tokenization: Moving beyond the hype to implement real-world asset (RWA) frameworks built on trustless, transparent, internet capital markets.

• Institutional Onboarding: Providing the policy, controls, and reporting layers that allow traditional capital to interact with decentralized rails.

• Risk and Policy: Translating DeFi primitives into familiar, compliant vehicles that meet the mandates of U.S. public company boards and U.S. institutional allocators.

We are already executing on this vision through several strategic initiatives:

• For Asset Managers: We are helping transition institutional income & credit portfolios onto onchain rails to internalize servicing spreads and automate covenant monitoring. By tokenizing LP interests and using them as collateral for credit facilities, we enable managers to unlock liquidity and amplify equity returns while maintaining their existing credit discipline.

• For Consumer Brands & Public Companies: We are creating low risk entry points into the digital ecosystem by tokenizing real world assets. Beyond just marketing / brand engagement, we provide a tailored roadmap for modernizing treasury operations. We help transition institutions from traditional cash management to stablecoin infrastructure held in qualified custody.

• For Protocol Treasuries: We structure capital efficient strategies that transform idle native tokens into productive collateral. By liquid staking and borrowing against these assets to deploy into RWAs, we help protocols generate institutional grade yield & unlock stablecoin liquidity while preserving their long term exposure.

Rooted in First Principles

The foundation for Solutions is rooted in our careers spent at the intersection of traditional and decentralized finance. From my time at Goldman Sachs originating CMBS, to Connor & Jack’s work at BlackRock on risk systems, we feel the time is now for the digital asset space to mature. We seek to bridge the sophistication of the traditional financial world with the powerful, cost-effective infrastructure that blockchain and digital assets enable.

In our lifetimes, we have been witness to several credit cycles, and the subsequent responses that governments and traditional finance took to standardize risk and avoid further contagion. This year, on October 10th, we witnessed another extraordinary series of liquidation events in DeFi. In the aftermath, we have concluded that DeFi has reached a similar point of maturity where its primitives require standardization to mitigate risks: transparent collateral, programmatic liquidations, and open state, are ready to serve as backend infrastructure for the financial world.

We are building for businesses and institutions that need: faster settlement, global reach, and programmable money. Birch Hill Solutions is how we deliver on that mission.

Bhavin, Connor, and Jack

This post is for informational purposes only. Birch Hill does not custody assets or provide investment advice. Certain products may be available only to KYC-approved counterparties.

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The decentralized finance landscape has matured significantly over the past four years. What began as experimental protocols has evolved into battle-tested infrastructure capable of supporting institutional capital allocation. Public companies and large allocators now hold roughly five percent of total circulating digital assets. Post GENIUS, as stablecoins trend toward cash equivalent treatment and qualified custody rails connect to DeFi, the constraint is no longer access. It is policy, controls, and reporting. Birch Hill is launching at this critical inflection point, where primitives have proven they are now ready to meet institutional demand.

Two distinct generations of lending protocols exist. First-generation platforms like Aave and Compound established the foundational mechanics: programmatic interest rates, overcollateralization, and automated liquidations. They proved that lending could operate transparently on-chain, surviving multiple market cycles and stress events. The second generation advanced risk management and reshaped who the major actors are and how protocols operate, once the infrastructure and building blocks were battle-tested. Morpho delivered superior capital efficiency with isolated lending pools while maintaining a strong security record through extensive audits. Euler pushed permissionless market creation and, after a significant exploit in March 2023, achieved full recovery and returned with hardened security practices and more than $2 billion in TVL. Maple brought institutional underwriting standards to on-chain credit, weathered 2022 defaults, strengthened credit underwriting, and has grown to more than $3 billion in TVL. The lessons are consistent: discipline matters, parameters are the product, oracle selection matters, and isolation prevents contagion.

This evolution mirrors the journey of traditional finance in the real estate credit space. By the time I joined Goldman in 2018 to originate CMBS in the Real Estate Financing Group, the market had developed standardized methods for rating collateral and structuring risk to avoid another 2008-style contagion event. DeFi protocols have converged on similar principles: explicit liquidation thresholds, transparent collateral requirements, and programmatic risk management. Now, institutional allocators face a similar question: how do we access on-chain yields while maintaining the operational controls required by our mandates? The answer is a product that translates DeFi primitives into familiar vehicles while keeping assets at qualified custody, routing only to allow-listed venues, and providing complete audit trails.

Vaults represent this translation layer. By wrapping battle-tested lending protocols within institutional-grade operational frameworks, vaults enable systematic exposure to DeFi yields through professionally curated strategies. New launches like Morpho’s direct integration with Coinbase QC are examples of the institutional DeFi gates being lifted. As more entities adopt mandates to hold digital assets, traditional staking yields alone will not be sufficient.

How Birch Hill Differentiates

Birch Hill aims to contribute to the network of risk curators that help protocols employ best practices in treasury and allocation management. We analyze how mechanisms perform under stress and identify design choices that create durable risk management frameworks. Methodologically, we fuse asset-specific risk modeling, focused on principal-loss probability, with systematic protocol selection to decide allocations. We underwrite positions across liquidity, collateral quality, liquidation mechanics, oracle behavior under stress, and utilization dynamics, then size and rebalance positions based on real-time monitoring.

In parallel, we vet venues for smart contract risk, liquidation mechanics, oracle integrations, liquidity depth, incentive sustainability, governance controls, and operational resilience to ensure exposures are expressed on the safest, most efficient rails. While we opportunistically harvest incentives, our edge is the quantitative pairing of the right assets with the right venues, at the right size and cadence. That is what drives more durable, risk-adjusted yield as token rewards and treasury priorities inevitably shift.

Our structure is intended to align incentives between token holders, protocol operators, and asset managers. By owning and operating the key layers of the stack, from risk intelligence and protocol infrastructure to originating products, we internalize costs and capture multiple revenue streams from institutional capital flows. Years of advising protocols on mechanism design and token reward systems taught us that sustainable growth requires sustainable incentive structures, ones that benefit all stakeholders, not systems optimized for short-term extraction at the expense of protocol health or token value.

DeFi set out to solve trust through transparent, programmable systems, yet trust remains scarce across much of the industry. Our thesis is simple: alignment and transparency build durable businesses, and the market will select for these qualities as decisively as it selects for capital efficiency. Risk assessment informs protocol deployment, which strengthens vault curation, creating a compounding loop.

We believe the next phase of DeFi growth will be driven by institutional capital seeking systematic exposure to on-chain yields. This requires infrastructure that translates proven DeFi primitives into familiar products while maintaining the operational standards expected in traditional asset management. Birch Hill is combining battle-tested protocols, systematic risk management, and vertical integration across the DeFi stack. We provide institutions with a single point of access to on-chain yields that preserves capital, enables liquidity, and delivers transparency.

Birch Hill was named after the street I grew up on, to anchor us in first principles. From Goldman and BlackRock to Birch Hill, the lessons are the same. Good systems work because the rules are visible, the incentives align, and the discipline compounds.

Bhavin Vaid

CEO of Birch Hill Holdings

This post is for informational purposes only. Birch Hill does not custody assets or provide investment advice. Certain products may be available only to KYC-approved counterparties.