The decentralized finance landscape faces a fundamental infrastructure problem: capital is siloed, yield sources are fragmented, and asset managers must rebuild integrations from scratch for each protocol. Railnet emerged in late 2025 as the solution—an open yield layer that standardizes how institutional capital moves between different yield opportunities onchain.
Understanding Railnet's Infrastructure Approach
Railnet is the open yield layer for asset managers to build composable strategies across any yield source and distribute them anywhere. Rather than competing for deposits like traditional DeFi protocols, Railnet connects asset managers, protocols, and platforms through a unified channel that eliminates integration friction.
The platform was launched in November 2025 by Kiln, an enterprise staking provider that manages over $18 billion in digital assets for clients, including VanEck, Crypto.com, Ledger, and Binance US. This institutional pedigree shapes Railnet's design philosophy: create infrastructure that meets the operational and compliance requirements of regulated asset managers while maintaining composability, which makes DeFi powerful.
How STEAM Powers Programmable Asset Management
At Railnet's core sits STEAM—the State Transition Engine for Asset Management. STEAM models capital movements as state transitions, where every operation, whether instant or multi-day, is expressed as a query that progresses through a standardized lifecycle.
This architecture solves a critical problem in traditional DeFi infrastructure. When you deposit ETH into a lending protocol, the transaction settles atomically in one block. But when you request exposure to tokenized U.S. Treasury bonds, the process involves KYC verification, compliance checks, and multi-day settlement periods. Most DeFi protocols force both scenarios into the same rigid framework, creating impossible tradeoffs between speed and regulatory compliance.
STEAM's state machine approach handles both scenarios through the same standard interface. An instant DeFi transaction moves through creation, acceptance, processing, and settlement in one transaction. A multi-day RWA investment enters a pending state during KYC, processes once approved, and completes when the underlying asset settles—all using the same query structure.
The Vehicle Architecture: Standardizing Protocol Access
Railnet implements STEAM through smart contracts called Vehicles. Each Vehicle wraps a yield source and exposes the standardized query interface, with complexity living within each Vehicle while the framework stays consistent.
The system distinguishes between two Vehicle types:
Yield Source Vehicles adapt external protocols to STEAM standards. One Vehicle handles Compound's instant lending, another manages tokenized treasuries with KYC requirements, and a third coordinates liquid staking. Each contains protocol-specific logic but presents the same standardized interface to the rest of the system.
Operational Vehicles orchestrate capital between yield sources. These focus purely on strategy logic—risk management, yield optimization, and rebalancing—while delegating protocol interactions to Yield Source Vehicles.
This separation creates flexibility similar to what cross-chain stablecoin infrastructure achieves for liquidity management. Market conditions change? Swap one yield source for another. Want to combine DeFi, staking, and RWAs? Compose Vehicles without custom development.
Solving the Institutional Infrastructure Gap
Despite an explosion in adoption and institutional acceptance, more than $280 billion in stablecoins today sit idle, generating no yield at all. Trillions more in tokenized assets including stocks and private credit are moving onchain without proper yield infrastructure.
The problem isn't lack of yield sources. DeFi platforms distribute tokens to increase token circulation, which helps boost user participation and liquidity, while users can leverage yield farming for passive capital appreciation across dozens of protocols. But each opportunity exists in isolation.
Asset managers face an impossible choice: specialize in a narrow set of protocols and accept commoditization, or rebuild infrastructure from scratch for every new yield source. Each integration becomes months of custom development, operational work, and bespoke risk handling.
Railnet standardizes this infrastructure layer. Build one Vehicle and it's instantly accessible to every strategy on Railnet. Build one strategy and it can immediately access every integrated protocol. The same pattern that makes programmable stablecoin transfers work across chains applies to yield infrastructure across protocols.
Current Partners and Integration Landscape
Railnet launched with strategic partnerships across the DeFi ecosystem. The initiative is in collaboration with Ethena, Sentora, and Chainlink, aiming to streamline yield management for institutional participants.
These partnerships demonstrate Railnet's positioning at the intersection of established DeFi protocols and institutional infrastructure. Ethena brings synthetic dollar exposure, Sentora contributes compliance infrastructure for institutional investors, and Chainlink provides the oracle and cross-chain communication layer that makes standardized yield infrastructure technically feasible.
The open and permissionless protocol design means any protocol can build Vehicles to access institutional capital, and any asset manager can compose strategies without rebuilding infrastructure for each integration. This creates network effects similar to how liquidity aggregation benefits from multiple protocols sharing resources.
Comparing Yield Infrastructure Approaches
The DeFi ecosystem has produced several approaches to yield management, each with distinct tradeoffs:
Traditional yield aggregators like Yearn Finance optimize returns by moving capital between protocols, but require users to trust the aggregator's strategy selection and accept the aggregator's risk management framework.
ERC4626 vaults have elevated DeFi vaults from boutique yield engines to an institutional-grade infrastructure layer, as standardization stripped away integration friction and unlocked nested fund-of-funds structures. However, these operate primarily within single-chain ecosystems and lack the compliance infrastructure required for regulated asset managers.
Railnet distinguishes itself through standardized state management that accommodates both instant DeFi operations and multi-day institutional workflows. The STEAM engine's state transition model provides the operational flexibility that RWA investments demand while maintaining the composability that makes DeFi protocols powerful.
Technical Implementation and Developer Access
Railnet operates as infrastructure-as-a-service for yield strategies. Developers building on Railnet access a unified API that handles the complexity of protocol-specific implementations behind standardized Vehicles.
The system supports both synchronous operations (instant DeFi transactions) and asynchronous operations (multi-day settlements for regulated assets). Native KYC and compliance logic lives at the infrastructure layer, eliminating the need for reimplementation for each strategy.
This technical architecture mirrors successful patterns in other DeFi infrastructure. Just as intent-based bridging protocols abstract routing complexity from end users, Railnet abstracts protocol integration complexity from strategy builders.
Risk Considerations and Security Framework
Institutional yield infrastructure must address several risk categories that casual DeFi users often overlook:
Smart contract risk exists at both the Railnet infrastructure level and within individual Vehicles. The protocol underwent audits before launch, but composability means strategies inherit risks from every protocol they touch.
Liquidity risk varies dramatically between yield sources. A lending protocol on Ethereum mainnet offers different liquidity characteristics than a tokenized real-estate fund with quarterly redemption windows. Railnet's state machine explicitly models these differences rather than pretending all yield sources behave identically.
Regulatory risk represents perhaps the most important consideration for institutional adoption. Railnet's native compliance logic and multi-day settlement support addresses requirements that pure DeFi infrastructure ignores, but regulatory frameworks for onchain asset management remain evolving.
The platform's institutional backing provides some risk mitigation—Kiln's SOC2 Type 2 certification and track record managing $18 billion suggests operational maturity beyond typical DeFi protocols. However, Railnet remains new infrastructure requiring due diligence before meaningful capital deployment.
Future Development and Ecosystem Growth
Railnet plans to launch in full production during 2026, expanding beyond the initial partnership ecosystem to support permissionless Vehicle development. The roadmap includes support for additional asset types beyond yield farming and staking, particularly tokenized securities and real-world assets.
The platform's success depends on network effects: more protocols building Vehicles attracts more asset managers, which attracts more capital, which incentivizes more protocol integration. This flywheel mirrors the growth pattern of successful infrastructure projects.
For comparison, the broader stablecoin infrastructure market grew from fragmented point-solutions to standardized protocols as the ecosystem matured. Railnet attempts to accelerate this process for yield infrastructure by launching with institutional partnerships and standardized specifications from day one.
Implications for DeFi and Traditional Finance Convergence
Railnet represents a specific thesis about how institutional capital will enter DeFi: not through consumer-facing applications, but through infrastructure that bridges operational requirements between traditional finance and decentralized protocols.
Since the 2008 Global Financial Crisis, there has been increased attention on inefficiencies, structural inequalities, and hidden risks of the intermediated financial system. DeFi promised solutions through transparency and programmability, but lacked the operational infrastructure to serve institutional allocators.
Platforms like Railnet attempt to complete this picture by providing the middle layer between raw DeFi protocols and institutional risk management frameworks. Whether this approach successfully channels trillions in traditional assets onchain remains an open question, but the infrastructure exists to attempt the experiment.
Getting Started with Railnet
For asset managers interested in exploring Railnet:
The protocol maintains documentation at railnet.org with technical specifications for Vehicle development. Early access programs exist for institutional partners meeting specific criteria around assets under management and regulatory compliance.
For protocols considering building Vehicles to access institutional capital, the process involves adapting existing smart contracts to implement the STEAM interface and undergoing technical review to ensure compliance with Railnet's security standards.
Individual users won't interact with Railnet directly. Instead, they'll access Railnet-powered strategies through asset management platforms, wallets, and applications that integrate the infrastructure layer.
FAQ
What makes Railnet different from yield aggregators like Yearn?
Railnet provides infrastructure for building yield strategies rather than executing strategies itself. It standardizes how capital moves between protocols and handles asynchronous operations like KYC and multi-day settlements that aggregators can't support. Asset managers build strategies on Railnet rather than depositing into Railnet.
Can anyone use Railnet, or is it institutional-only?
The protocol is open and permissionless at the infrastructure level, but strategies built on Railnet may have institutional-only access depending on regulatory requirements. Retail users will access Railnet-powered products through applications that integrate the infrastructure.
How does Railnet handle compliance and KYC requirements?
STEAM's state machine models compliance workflows as part of the standard query lifecycle. When a Vehicle requires KYC, queries enter pending states until verification completes, then proceed through processing and settlement. This native compliance support distinguishes Railnet from pure DeFi infrastructure.
What's the relationship between Railnet and Kiln?
Kiln built and launched Railnet, but designed it as an open protocol where Kiln is one participant rather than the gatekeeper. Any protocol can build Vehicles and any asset manager can compose strategies without requiring Kiln's permission or involvement.
Does Railnet compete with existing DeFi protocols?
No, Railnet is an infrastructure that connects to existing protocols rather than replacing them. It aims to increase capital flowing into protocols by making institutional access easier, similar to how stablecoin liquidity infrastructure increases stablecoin usage across the ecosystem.