Invest2 publishersIndependently confirmed3 min readPublished
GSR's $100 million behind Hare is mostly a credit line seeding the startup's vaults
GSR is committing $100 million, mostly through a credit facility, to Hare, a new onchain vault business built with Turtle. Its money goes in first as anchor liquidity, so Hare becomes a product line only if outside allocators follow.
The Investor · Invest desk
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What happened
- Hare's two launch vaults run on Aave: Hare USD Earn takes major dollar stablecoins and Hare Gold Earn takes Paxos' tokenized gold, PAXG and PAXGy.
- Credit is where Hare says it will specialise, judging collateral and counterparties and how positions would behave when markets come under stress.
- Connor Milner, Hare's CEO, was previously a senior director at Re7 Capital, a London-based DeFi hedge fund.
- Galaxy Digital has launched Galaxy Curator, a Morpho-based vault platform that opens onchain yield strategies to Fireblocks' 2,400 institutional clients.
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Why it matters
- exposure Until outside deposits arrive, a bad Aave position in either vault is a loss on GSR's own capital before it is a loss for any client.
- decision Allocators weighing Hare have to judge whether GSR's money in the same vault aligns interests or is GSR earning yield on its own facility through a curator it owns.
- capability Paxos gets a funded yield venue for PAXG and PAXGy holders at launch, before any third-party demand to lend its tokenized gold has shown up.
- precedent Any rival market maker promising issuers the same day-one liquidity would need an anchor of similar size on its own books.
A credit facility is a commitment to lend as money is needed, and CoinDesk reports that most of GSR's multi-year commitment to Hare takes that form [1][2]. The capital goes into Hare's own products as anchor liquidity before outside investors arrive [2]. In my view the $100 million is best described as a ceiling on how much GSR itself will deposit in vaults run by a business it owns. Neither report discloses how much of the figure is credit or how long the facility runs.
In a curated vault, depositors put assets into a smart contract and a curator decides how to spread them across lending markets and other strategies [3]. Hare is the curator here, and Aave is the lending protocol under both launch products [4]. The capital is for deposits. GSR is not paying to build or secure a lending protocol of its own.
Vaults.fyi counted $8.6 billion across 788 curated vaults in July [6], or about $10.9 million per vault [15]. GSR's commitment, fully drawn, comes to about nine times that average [16] and about 1.2% of everything in curated vaults at the time [17]. Two Prime's new bitcoin lending vault on Pareto launched with $10 million of backing [10]. That is a tenth of GSR's figure [18].
"GSR's commitment is deployment capital," Hare CEO Connor Milner told CoinDesk in a statement. "Issuers get liquidity from day one, and allocators see GSR's own capital in the same vaults as theirs." [7]
Crypto Briefing describes GSR as treating credit as a dedicated line of business [14], and the year's spending is consistent with that: $57 million for Autonomous and Architech in March [12], then Cayman registrations and a FINRA-registered broker-dealer in September [13]. The Hare commitment is about 1.75 times the March purchase price [19], though a facility only becomes money out the door as it is drawn. The sources show one market maker putting its balance sheet behind vaults. The other entrants CoinDesk names are Galaxy and Two Prime, a crypto lender [10][11], and two names are too few to support a claim about market makers as a group.
If outside allocators deposit, GSR's share of the vaults falls and Hare becomes a business managing other people's money with its owner as the largest depositor. If they stay away, Hare USD Earn and Hare Gold Earn hold mostly GSR's money earning Aave yield, a treasury operation under a separate name. I'd expect something close to the second for the first few quarters, because the design puts GSR's money in before anyone else's [2]. The case that vaults are a product line for GSR fails if, a year after launch, GSR is still the majority depositor in both vaults.
What to watch
- Deposit figures for Hare USD Earn and Hare Gold Earn that separate outside money from GSR's anchor capital.
- Whether GSR routes Hare's vault activity through its new US broker-dealer or its Cayman-registered entities.
- Any disclosure of how much of the $100 million is credit facility, how long it runs, and how much GSR has drawn.