Polygon's Vault Bridge turns idle bridged assets into productive capital, powered by Morpho
$230M+
$500M+
$3M+
“Vault Bridge is designed to turn bridged TVL into durable, chain-native revenue. Assets bridge 1:1 as usual, while escrowed liquidity on Ethereum is deployed through Morpho vaults and the yield flows back to the ecosystem.”Marc Boiron, CEO of Polygon Labs
The Opportunity
When a new chain launches, bridging is often the first meaningful inflow of liquidity. In most designs, those assets sit idle in escrow contracts on Ethereum. They secure withdrawals, but they do not help bootstrap liquidity, incentives, or early market depth on the destination chain.
That leaves teams with limited options. Sequencer fees are meaningful only at scale, and emissions can be expensive to maintain and difficult to justify over time. For many chains, the opportunity is straightforward: instead of leaving bridge collateral dormant, convert it into a funding source that grows with adoption and can be reinvested into the chain’s core markets.
The Solution
Morpho sits at the center of Vault Bridge’s design. When a user bridges supported assets, the bridge keeps the familiar 1:1 flow on the destination chain, but changes what happens to the collateral on Ethereum. The original tokens remain on Ethereum and are deposited into Morpho Vaults, where they can earn yield under curator-managed strategies.
Morpho sits at the center of Vault Bridge’s design. When a user bridges supported assets, the bridge keeps the familiar 1:1 flow on the destination chain, but changes what happens to the collateral on Ethereum. The original tokens remain on Ethereum and are deposited into Morpho Vaults, where they can earn yield under curator-managed strategies.
Vault Bridge implements this through Vault Bridge Tokens (vbTokens). A user deposits an asset like USDC, USDT, WETH, or WBTC into Vault Bridge on Ethereum and receives the corresponding vbToken on the destination chain. The vbToken is redeemable 1:1, but it does not accrue yield to the holder by default. Instead, the yield generated on Ethereum is routed back to the chain as ecosystem revenue, to be used for incentives, liquidity programs, or other priorities set by the chain.
For users, this means the destination chain has a built-in revenue engine at launch that helps bootstrap the ecosystem liquidity and growth, making it a more attractive ecosystem for new users and new ecosystem apps.
Katana is the first L2 built around this primitive. It uses vbTokens across its DeFi stack, while the Morpho-generated yield is directed to the network to provide additional yield for enshrined apps, including Morpho, Sushiswap, and more.
The Results
Vault Bridge is already operating at scale, with more than $230 million in assets deposited and earning yield today. That turns bridged TVL into a recurring funding stream that can be directed to liquidity, incentives, or broader ecosystem priorities based on governance.
Katana illustrates the compounding effect. By the end of Q3 2025, Katana’s productive DeFi TVL reached roughly $500 million, with nearly 95% of assets actively deployed, and vbUSDC became a major component of its stablecoin base. Katana has also generated $3M+ in chain-owned revenue to date.
Vault Bridge extends Morpho Vault as the default lending infrastructure into new chains, where capital efficiency at the bridge layer directly supports growth on the destination ecosystem.