Morpho co-founder and CEO Paul Frambot published a post arguing for distinguishing on-chain vaults into “non-custodial” and “self-discretionary” types: the former allows users to exit on their own within a reasonable time when managers are attacked, go missing, or perform malicious operations, while the latter grants managers greater authority over asset allocation and strategy adjustments; Frambot classifies Morpho Vaults as the former, citing time locks, guardians, permission controls, physical redemption, and immutable contracts as evidence. Aave founder Stani Kulechov then rebutted that this classification criterion is overly broad and self-serving, saying that only vaults without managers and that rely mainly on predefined rules are closer to true non-custodial. Lawyer Gabriel Shapiro and people from projects such as Veda and Glider also questioned that time locks, role-based permissions, and on-chain transparency are more like security mechanisms and cannot eliminate a manager’s substantive control over risk parameters and asset allocation.

SEC Commissioner Hester Peirce previously pointed out that the management model for on-chain treasuries can range from being driven entirely by immutable smart contracts to being decided autonomously by individuals or teams regarding asset allocation, and that some management activities may involve issues related to investment adviser regulation. (The Defiant)