A curated vault is a pooled deposit contract where a named third party, the curator, chooses which lending markets or other yield sources the pooled capital is allowed to enter and how much can go into each. The protocol supplies the venue and the code. The curator supplies the allocation decisions.
The split follows the traditional distinction between the venue and the manager, and curation as a discipline, including how curators are paid and evaluated, is covered in vault curation.
What is a curated vault?
It is a vault with a manager attached, where the manager's powers are written into the contract rather than into a fund agreement. A depositor puts one asset in and receives shares recording a proportional claim on the pool, exactly as in any DeFi vault. What differs is that the pool does not sit in a single market.
Morpho's documentation describes its vaults as providing "universal yield routing" where "curators can enable approved adapters rather than hard-coding a single yield source". An adapter is a connector contract linking the vault to one underlying venue, the curator decides the set that is switched on, and the depositor holds a single share against all of them at once, whatever that set happens to be on any given day.
What does the curator actually decide?
The eligible venues, how much exposure each is allowed, what the vault charges, and how quickly any of that can change. In Morpho's vault design the curator "configures adapters, caps, fees, and interest rate limits" and can set both absolute caps, meaning a fixed asset amount, and relative caps expressed as a percentage of the vault's total assets.
Caps reach beyond a single market. The same documentation describes caps on "abstract risk identifiers such as collateral, oracle, or protocol exposures", letting a curator limit total exposure to one price feed or one collateral asset across every market the vault touches. That is risk budgeting, the part of curation closest to a mandate.
Powers are deliberately split. Most curator actions are timelocked, meaning they must be submitted first and executed only once a delay has elapsed. An allocator moves assets between enabled adapters within those approved parameters, an owner appoints or replaces the curator with no timelock on that action, and a sentinel can revoke a pending proposal before it takes effect. Roles do not inherit each other's permissions.
What a depositor actually ends up holding
You do not choose a market. Exposure is the union of every position the curator has enabled, weighted by whatever the allocator has actually moved, and you choose a curator instead, receiving a blended exposure that changes as they change it within the caps and timelocks the vault was configured with.
Direct supply into a single market gives you one collateral type, one price oracle and one set of liquidation parameters, all visible before you deposit, whereas a curated vault hands you a portfolio of those assembled by someone else, and the composition on the day you deposit is not the composition six months later. You gain diversification and continuous monitoring. You also take on a discretionary manager whose individual decisions you never approved.
How does a curated vault differ from a plain pooled vault?
A plain pooled vault points at a fixed destination, so capital goes where the code says and changing it requires a new contract, leaving nobody with a live allocation decision to make and no manager to evaluate; a curated vault points at whatever the curator currently has enabled.
Curation moves the risk from the code to the judgement, and two questions follow. First, what happens when a curated position cannot be exited or valued, because losses land on depositors through the share price rather than on the curator. Morpho's documentation describes automatic loss socialization, where losses "are detected and distributed proportionally across all shareholders through share price depreciation". Second, who is accountable. Curators are usually independent firms operating on a protocol they do not control, earning a fee on assets or performance, and the allocation of liability between protocol, curator and depositor when a position fails is not settled by the code and largely untested in practice.
How does this apply to an institution?
The diligence object is the curator, not the vault, so an allocator evaluating one of these is doing manager selection: track record, the caps in force, the length of the timelock, who holds the owner key that can swap the curator out, and what the vault does when an underlying position stops settling. The answers are onchain, more than most manager diligence offers.
Railnet provides the operating layer on which curators build, monitor and report on these strategies across venues.
FAQ
What is a curated vault?
A pooled deposit contract where a named curator selects the yield sources the capital may enter and sets limits on each. The protocol provides the market infrastructure and the code. The curator provides allocation and risk decisions. Depositors hold one share representing the blended result.
Who bears the loss if a curated position fails?
Depositors, through the share price. Vault designs that socialize losses distribute them proportionally across all shareholders when they are detected. Whether the curator carries any liability beyond reputational and contractual terms is unresolved in most jurisdictions and largely untested.
Is a curated vault safer than depositing into one market directly?
Different, not automatically safer. You gain diversification and continuous parameter monitoring. You take on discretion you did not approve position by position, plus exposure to every venue the curator enables, including ones added after you deposited.