Cofounder & CEO @Morpho
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We’ve just raised $175M, in a round co-led by @paradigm, @a16zcrypto, and @RibbitCapital, the largest raise DeFi has ever seen.
Credit is the bedrock of our civilization, but the infrastructure underneath is fragmented, extractive, and closed to most of the world. That is what @Morpho is here to change.
Morpho is building the open credit network for the world. The global credit market is $ 200T. We are building the infrastructure layer that will move it onchain, and every institution, fintech, and bank that wants to participate in the next era of finance will connect to this network.
After four years of being heads down building Morpho, we now count more than $11B in deposits and integrations with leading financial institutions including @Coinbase, @Binance, @FireblocksHQ, @SG_Forge, @krakenfx, @Bitwise, and dozens of others building on Morpho to offer better products to their users. But this is just the beginning.
This raise will allow us to accelerate: activating the global credit network at scale, building the go-to-market engine to match our ambition, and bringing more institutions onto the network faster.
Having any kind of onchain strategy in this era will mean going through Morpho at some point. Reach out and let's talk. And if you want to help build the open credit network for the world, we have plenty of open roles.
Let’s fly 🦋
Morpho Association has raised $175M to build the open credit network for the world.
Co-led by @paradigm, @a16zcrypto, @RibbitCapital with strategic participation from @apolloglobal, @vaneck_us, @circle_ventures, and @Ledger @Cathayinnov.
The round also included participation from @variantfund, @wmt_ventures, @preludexyz, @IOSGVC, @HashKey_Capital, @sbigroup, @Bpifrance, @mirana, @bamazizimesh, NJJ Capital and 10+ other strategic partners.
The funding will help accelerate Morpho's position as the foundation for onchain credit.
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Coinbase launches crypto-backed loans powered by Morpho in its main app!
This is the largest-scale DeFi integration ever, with far-reaching implications for the future of DeFi, Crypto, and the entire financial industry.
👇
Bitcoin-backed loans are here.
Borrow USDC against bitcoin, without selling it. Rolling out to US users (ex. NY) starting now. More collateral assets and regions to come. Powered by @MorphoLabs and built on @Base.
The future of finance is onchain.
Learn more: coinbase.com/blog/now-get-a-…
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A vault is comparable to an onchain fund, and just like traditional funds, some will perform well and others won't, but this is what we must accept and mitigate if we want to build a truly open and decentralized system.
The fact that only 1 out of ~320 vaults on the Morpho App had limited exposure to xUSD isn't evidence that the model doesn't work — quite the opposite. Morpho's isolated market + vault model meant all 319+ other vaults and their depositors, each with different risk profiles, had zero exposure.
Many assume losses equal system failure. However, in open financial systems, losses are a natural consequence of risk-taking, even when systems operate exactly as designed. As an industry, we should not fall for the fallacy that yield is risk-free. Instead, we should focus on better surfacing and educating about risks — ourselves included.
For DeFi to be the backend of finance and scale to trillions in lending volume, lending infrastructure must remain separate from risk management. We firmly believe that this open and permissionless approach is the right one, and how DeFi was intended to work.
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Last week, 6 out of 30 candidates interviewed by our recruiter were likely North Korean hackers using deepfakes to disguise their accents and facial expressions.
Now implementing stricter hiring protocols eg. thorough background checks, in-person meetings, ... Any suggestions?
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Today, we finally bring Morpho V2 out of stealth.
After 4 years of building, this is by far our most ambitious release.
An intent-based lending platform powered by fixed-rate, fixed-term loans, built to expand the boundaries of onchain loans. 🦋🦋
Today, we unveil Morpho V2.
An intent-driven lending platform powered by fixed-rate, fixed-term loans.
Designed to liberate the potential of onchain loans.
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The screenshot I send to people asking me if it is worth having @a16zcrypto in their round.
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Today, we are announcing that Morpho raised $50m from Ribbit Capital, with participation from @a16zcrypto, @cbventures, @variantfund, @BHDigitalAssets, @PanteraCapital, @BlockTower and 50 others.
1/7
We're excited to announce that Morpho has secured $50M, led by Ribbit Capital!
The funding from Ribbit and other strategic partners further enhances Morpho's decentralization and supports its mission to make financial infrastructure a public good.
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A year ago, was invited to Money2020 but declined because I saw no fintechs/institutions integrating DeFi.
A year later, I am there with 15 meetings lined up with non-crypto-native enterprises looking to build on Morpho.
So much has happened in our industry in one year.
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Ribbit is absolutely goated, recommend reading their token letter.
What strikes me most is how little they talk about themselves and their work— no loud online presence, not even sure they have a twitter account...
You only hear about them through high-quality people, through word of mouth.
Have you read this? @RibbitCapital’s new Token Letter lays out the future of AI and the road ahead. Reminds me of the early days of mobile when everything was so opaque and, in hindsight, so obvious. Maybe the most formative synthesis of the AI shift we’re experiencing everyday. This is the future. Let’s build it.
docsend.com/view/hcv2rx2cq7h…
(Yes, put your email address in, this is posted on their website)
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We don't talk much, don't tweet much, don't pick fights online all the time... but man, we are grinding like hell.
Morpho team is quiet but is the hungriest team out there. Every contributor is completely all in.
All cofounders forfeited their rights to work on or invest their money in any other project.
I have been working on Morpho for the last 3 years completely non-stop, spending every minute I had either building or thinking about it.
We won't stop until all financing infrastructure—both inside and especially outside of crypto—is built with Morpho 🦋.
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9 months ago @gauntlet_xyz left a $1.6M contract with Aave to build on Morpho.
Now @gauntlet_xyz is generating over $3.4M ARR on Morpho.
They don't need to be friends with me to be paid. They have full ownership of their contracts and fees.
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Coinbase is the first company to deliver large-scale financial apps with Web2 feature/UX parity, enhanced by Web3 infrastructure.
In months, they launched loans, trading, and Earn, powered by Morpho. Insane shipping pace for such a large company.
Now you can lend your USDC and earn more (up to 10.8% currently).
It’s simple to use, and gives users the benefits of DeFi without the complexity. Rolling out now in multiple countries, including the US (ex. NY).
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If I learned one thing in 6 months: this industry is vastly underestimating how smart and how fast TradFi is onboarding onto crypto rails.
Crypto-native teams must be much (much) more ambitious or they will all be crushed.
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My favorite part of building Morpho probably has been the learning curve. I started at 19 with 0 professional experience. We made every classic founder mistake imaginable and lost a lot of time, but we learned fast, and compounded.
Beauty of compounding is that it’s exponential. I feel 2x more efficient than last year, and 10x more than when we started. Accelerating Morpho's output has just been ultra satisfying.
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Senior operations roles are so underrated in crypto. Most founders are turbo autistic kids who have no idea how to run a company.
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Now the Ethereum Foundation itself is parking their money on Morpho on @ethereum!
0/ Today, the Ethereum Foundation deposited 2400 ETH and ~$6M stablecoins into Morpho’s yield-bearing vaults.
Morpho is a pioneer in permissionless DeFi protocols and consistently demonstrates a commitment to Free/Libre Open Source Software (FLOSS) principles.
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I am very down. @StaniKulechov, are you in?
I'd like to invite @PaulFrambot and @StaniKulechov onto Bell Curve to discuss the isolated risk model in lending.
Some very good points from both sides made this week, retweet if you'd like to see these two legends on a pod 🫡
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1. Aave pitches multiple bridges to deposit assets on Aave.
2. A proposal goes live to use Morpho and not Aave.
3. Aave says bridges should not do it anymore.
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I spent 2 years building in DeFi. Despite Morpho reaching $1B in deposits in the middle of the bear market, we chose to rebuild everything with Morpho Blue.
Here are key insights and takeaways that guided this decision:
1/ We must acknowledge that, in its current state, DeFi will never support the trillions of real-world finance.
2/ Efficiency, flexibility, and resiliency are multiple orders of magnitude behind TradFi.
3/ Most of DeFi activity today is (in)directly sustained by either token incentives or speculation.
4/ DeFi is stuck at a local extremum.
5/ Looking for incremental design improvements won't get us anywhere long term.
6/ Most DeFi platforms rely on manual and trusted operations behind the scenes.
7/ DeFi platforms audited fewer than three times are likely to still have critical vuln. (FYI, major bug was found in AaveV2 last week).
8/ DeFi primitives should build true protocols, not financial products onchain.
9/ Considering UX and features in your protocol equates to building a financial product.
10/ Building on top of financial products onchain is like building a company on the Twitter API.
11/ Try not to enshrine opinions in the protocol, let DeFi products built on top opinionate.
12/ Expressiveness leads to scalability.
13/ Excessive expressiveness in the initial version of a protocol makes it unusable.
14/ UNIX principles gud.
15/ Minimalism gud.
16/ Focus gud.
17/ Try to do things that truly, fully make sense. DAOs and tokens are rarely the answer.
18/ DAOs and tokens are actually the right form of ownership for protocols, but understanding how to use them wisely is hard.
19/ Network effects should be the main (only?) source of revenue for DeFi protocols.
20/ The promise of DeFi is too big to fail. wagmi.
Could expand the list significantly more, lmk if useful.
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Today, Morpho is launching on @base, the first L2 in its history.
For the past two years, I have been opposed to deploying on any other chain because I wanted Morpho to maintain a narrow focus. At the time, we couldn't envision a new deployment doubling Morpho’s TVL. But things have changed.
I believe Base can outgrow the current deployment on Ethereum over the next year.
Base is being built to onboard the next billion users: low fees (op stack), UX (AA Kit), distribution & brand (Coinbase), … and soon, Morpho will become the prime lending and borrowing protocol there.
To celebrate this launch, the DAO voted for a large number of MORPHO tokens to be distributed to the first users of Morpho on Base!
The wait is officially over.
Morpho is now LIVE on @base.
Earn, borrow, and build on Morpho.
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In just a year, Morpho's growth team has switched from telegram BD to the largest banks in the world.
Incredible growth from @kugusha and the team!
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I've received many congratulatory messages... I'm grateful 💙, but folks, this is "just" the token launch. Save the big congrats for when Morpho truly changes finance.
Morpho is building the internet protocol for lending and borrowing. In the coming years, Morpho will connect anyone who has surplus capital seeking interest with anyone who needs financing—all in the most open, efficient, and resilient way.
If we don't want to replicate traditional finance's mistakes, the protocol must be community owned. In that sense, today is historic for Morpho. But bear with me—the token launch is not an achievement in itself. It is a mean to an end.
We are still day 1.
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There is now $60M of BTC collateral and $30M of USDC active loans coming directly from the Coinbase App onchain on Morpho on @Base.
Numbers growing linearly as the app is rolled out to more users.
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This @EthCC felt different: 0 grift, more maturity.
- Existing leaders are consolidating and expanding their teams.
- Grifters and small crypto teams were almost absent.
- Mostly high quality convos.
- BD is now Enterprise Sales.
- Fintechs have arrived and well: everyone has seen RH's announcements but it's only the tip of the iceberg.
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@MorphoLabs → @Morpho
As a reminder, the company Morpho Labs no longer exists. We now operate as a French shareholder-free association.
The only asset is the $MORPHO network token, no equity.
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Polygon has $1.3B in unproductive stablecoins in the PoS bridge.
That’s $50-90M in potential yield at current rates.
The proposal: deposit idle stablecoins into a Morpho Vault and redistribute the yield to Polygon’s DeFi ecosystem—kickstarting a flywheel.
Why Morpho:
- Full control: Markets are immutable, Polygon owns the code. Vaults controls the risk and can choose the curators they want, in this case Allez.
- Tailored: Polygon can choose exactly which markets/collateral fit their needs, no conflicting interest.
- Secure: built on immutable, minimal, formally verified code.
- Network: polygon can leverage all the Morpho state (liquidity and borrowers).
This is the first of many. Own your lending platform.
Today @AllezLabs, @MorphoLabs & @Yearnfi posted a pre-PIP for a Polygon PoS Bridge Liquidity Program.
This community-led proposal discusses activating stablecoin reserves on the PoS Bridge & directing yield into new incentive programs.
Give feedback:
forum.polygon.technology/t/p…
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When we launched Morpho V0 (Optimizer), nothing like it had ever been done → it reached $1B in 1.5 years.
With Morpho V1 (Blue), we introduced the era of curators → it reached $10B in 1.5 years
Now Morpho V2 is coming. Inspired by DeFi’s best ideas, but introducing a completely new lending paradigm, uniquely built for institutions, fixed rate, cross-chain and... much more 🦋→ This time, the scale is going to be massively different.
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The more I learn about tradfi infra, the more I realize that 90% of businesses are just "reliable database reconciliation".
In 5 years, DeFi as the universal backend for finance will feel obvious — and we’ll all wonder how fragmented, asynchronous legacy systems ever worked.
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Excited for Morpho to launch @HyperliquidX!
We already have $600M in deposits there, but I think we're just scratching the surface.
Hyperliquid has a unique community, flywheels, and builder energy unlike anywhere else.
As we saw them build on Morpho, @felixprotocol and @hyperbeat kept impressing us, and today we're rolling out our consumer App, curator App, SDKs, rewards, and APIs to support them!
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The @Visa team just published a whitepaper on stablecoins beyond the payment opportunity, explaining how Morpho-powered use cases have put billions of stables to work with institutional-grade onchain loan solutions.
Visa is looking ambitious!
Stablecoins & lending protocols will be the foundation of global credit.
@Visa's new whitepaper on stablecoin lending highlights several Morpho-powered use cases that have put billions of stablecoins to work.
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So. Aave is attempting to prevent the growth of Morpho by introducing Merit, a rewards program. Although I prefer to avoid drama/politics to focus on Morpho, I have been asked countless times to comment on this proposal. Hence, I will simply provide some clarifications on the various statements made about the Morpho protocol in the Aave forum.
« Aave invented Ethlend, which is the design behind the Optimizers »
No, Morpho Optimizer’s design is not related to EthLend’s design. Overall, there seems to be a lack of understanding of how Optimizer works in the Aave forum. One can learn about it in the Morpho documentation. We also have a full formal description of the protocol in our Yellow Paper.
«Morpho optimizers are a leech on top of the Aave protocol that provides zero benefits »
This is not true. Morpho brings a lot of liquidity and revenue to the Aave DAO:
- Current liquidity deposited by Morpho on Aave: ~$1.3B.
- Current liquidity borrowed by Morpho on Aave: ~$500m.
- Interest generated by Morpho for Aave: $7.5m.
The Aave DAO would very likely lose earnings without the efficiency improvements of Optimizer and MORPHO tokens that attract Morpho users and end up benefitting Aave. The math/data behind the value accrual of Optimizer is clearly non trivial. I am sure the Aave token holders would like at least a bit of transparency on this rather than false claims: “zero benefits”. This goes without mentioning that the Merit program is based on a closed source algorithm.
« Blue protocol, it’s more a MakerDAO & Compound V3 competitor than an Aave one »
Morpho Blue is competitive to AaveV3 and CompoundV3, not really to MakerDAO. Actually, the AaveV3 protocol is one example of something you can build with Morpho Blue & MetaMorpho.
While we are disappointed by the lack of courtesy in the language used by some of the Aave delegates, we respect the Aave DAO as a competitor and its choice to try to counter Morpho.
Of course, the Morpho DAO shall consider its own response, in time. One that does not disguise design inefficiencies with cash distributions to competitors, but that accelerates the rise of Morpho Blue as the most secure, efficient, and flexible lending protocol.
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Advisory & investments in projects are forbidden for the @MorphoLabs core team.
As it is quite uncommon (especially in crypto), and people always ask me, I thought I’d explain
👇
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Marc, Sandeep and the Polygon team put together the full story of what happened on the bridge proposal. Very courageous move. Many teams are facing similar situations but would never speak up like this. Times are changing now.
I highly recommend reading the full post 👇
TLDR:
• Polygon governance was great over the last few days, showing it knows how to take a strong position against a proposal it dislikes.
• Aave and surrounding teams are monopolies that use dirty tactics to create fear.
• Aave and those teams did the same when proposing to shut down Polygon PoS in reaction to Morpho potentially receiving bridge assets that they themselves made a proposal for a month ago.
I’m proud of the governance process that played out in only a few short days on the Polygon forum and X. People should always stand firm in what they believe and make their voices known.
Others need to be outed for the destructive impact they have had on the web3 ecosystem, exhibiting massive monopolistic behavior to control lending in web3. Specifically the Aave and ACI teams were at their usual games yesterday. At the mention of only a pre-pip (many months away from anything real potentially happening), they put forward a proposal to wind down activities on Polygon PoS. Unlike Polygon governance, Aave governance is highly concentrated. @marczeller (Mark Zeller) reminded me of this yesterday when sending an unsolicited DM trying to intimidate me by informing me that his Aave DAO proposal was guaranteed to pass. I’ve never spoken to Marc Zeller in my life, and it was unsolicited only to create fear. The problem for him is that Polygon isn’t a nascent ecosystem that fears Aave; unfortunately, not all are in the same position, especially other lending protocols they attack.
Aave will seek support as they did yesterday to respond to this tweet and others to retain the control they have over lending in this industry. However, new players are emerging who will create a better web3 future. Upstanding people like @PaulFrambot , Founder of @MorphoLabs, @euler_mab, Founder of @eulerfinance, and @CoreyCaplan3, Founder of @Dolomite_io, will disrupt lending on a level playing field. Let’s create that level playing field so web3 should become what it can be.
How can web3 be better? Let’s just take Morpho as an example:
• Morpho developed simple, immutable code like Uniswap that can be deployed without centralized risk management of the Aave DAO. Decisions are made by that captured Aave DAO. Some say “just use Aave” but I think they really mean, “just use Marc Zeller.”
• Morpho has a much simpler code base with fewer attack vectors. Morpho actually used to use Aave until it had to fix so many bugs that it decided to build something better. No more constant war rooms that one day will unfortunately fail for Aave users.
• Morpho allows for significantly greater capital efficiency that can be tested and improved on in independent implementations of Morpho. This cannot happen with one giga-deployment of Aave that needs to be more conservative simply because it is less efficient.
• Morpho is so much simpler than Aave that it has much lower gas fees (3-5X lower fees). This is great for more complex integrations with a lending protocol.
• Morpho allows users to create personalized lending markets tailored to their specific needs and risk appetites. Aave has a standardized approach, where lending conditions are uniform across all of Aave.
• Morpho has a peer-to-peer lending model that mitigates overall economic risk for users. The impact of a default is limited to the specific market involved, preventing a single default from affecting other markets within the protocol. Aave's pooled liquidity model means a single default could potentially destabilize the entire pool. The whole concept of bad debt is so broad on Aave that all users need to at all times be vigilant.
It's time we build a truly open web3.
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I've been discussing Morpho with institutions for two years now.
Most of it has been unproductive, but the last six months have been markedly different.
DeFi’s time has come. It is all happening right now.
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Marc, unlike on Aave, Morpho users are free to choose which assets they use as collateral, the oracle and the Liquidation LTV.
Does that mean that all strategies are risk-free? Of course not! Users can take the risk they want.
Morpho Blue is a permissionless lending and borrowing protocol. If users aren't complex enough, they can delegate the hard work to our vast ecosystem of risk curators like @gauntlet_xyz (that helped curate Aave for 4 years) @BlockAnalitica @SteakhouseFi @bprotocoleth @Re7Capital ... or borrowing automations like on @summerfinance_ @DeFiSaver or @Instadapp.
Even if you always like to compare Aave with Morpho, you have to understand that both approaches are VERY different:
- Aave is a financial product: you try to guarantee to your users that they won't loose too much money because you manage their money for them, like fund/broker but more decentralized.
- Morpho is an immutable financial infrastructure: Complex users can do their own risk management. Clueless users can delegate the hard work.
This is called a turkey chart.
When your protocol, by design takes shortcuts on risk and oracles everything great until suddenly it’s not.
Just use Aave.
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Everyone said: DeFi will have to wear suits to succeed in TradFi.
I think it is more: TradFi will need to wear shorts, use pixelated profile pictures, and get Telegram approved by their compliance to thrive in DeFi.
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Wall Street understood that Stablecoins are Money 2.0., now it is time to understand that Vaults are Money Management 2.0
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Steps to make an impact on the world usually are:
1. Have an ambition, 2. Be trusted with some capital, 3. Execute well.
In 10 years, I hope Morpho has made trust (2.) much cheaper—empowering every human ambition with open access to capital.
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I have made over 200 calls but it was worth it 👇
1️⃣ @a16z and @variantfund co-lead.
2️⃣ 20+ funds: @nascentxyz , @SemanticVC @CherryVentures, @Coinbase, @MechanismCap, @sparkcapital, @standardcrypto, …
3️⃣ 60+ angels.
Morpho is now ready to reshape DeFi as we know it.
We're excited to announce Morpho’s $18 million funding round co-led by @a16z and @variantfund to transform decentralized lending!
medium.com/@PaulFrambot/morp…
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Morpho Vaults V2, the new standard for noncustodial asset management aka "asset curation”, are now live in production!
Vaults V1 was the 0→1: it pioneered the asset curation model, creating an entirely new industry with $11B+ in deposits and 30+ active curators on Morpho generating $25M+ ARR.
Vaults V2 is the 1→100: after a year of work and 6 audits, we're releasing general, open-source, institutional-grade vaults.
This is by far the most ambitious protocol we've ever shipped, built to generate yield for every asset in the world and prepare Morpho for all its future evolutions.
The 1→100 moment for vaults is here.
Morpho Vaults V2 is a new open-source standard designed to power the future of asset curation.
Live now on @ethereum and soon onchain everywhere.
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Morpho founders are committed to investing their time and money solely in Morpho.
Yet, we recently assembled a collective of 80 Morpho-aligned angels & investors, who are reviewing pitches from Morpho builders, curators, and distributors... DM if you want to share your blurb.
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Just realized that Morpho is probably the only DeFi project that shipped two completely different protocols and got them both above $2B back-to-back 🦋
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The Two Paths Ahead For DeFi:
Decentralized Brokers vs. Protocols.
🧵
morpho.mirror.xyz/KCMBXBYPOE…
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Today marks a historic shift for DeFi lending.
We are thrilled to announce that @Gauntlet decided to build their own MetaMorpho vaults on top of Morpho Blue!
Learn more below 👇
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1/ We are thrilled to announce that @gauntlet_xyz is joining Morpho!
Gauntlet will curate various MetaMorpho vaults on top of Morpho Blue and contribute to the sophistication of the Morpho ecosystem.
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One of the world’s largest banks, @SocieteGenerale, is entering DeFi, taking its loan book onchain through its digital assets arm. All powered by @MorphoLabs.
SG Forge is offering lending and borrowing in EURCV and USDCV through a Morpho Vault curated by @MEVCapital, the first of its kind.
Traditional loan books are siloed. Onchain lending makes them global: faster, cheaper, and more transparent, creating a marketplace where everyone enjoys optimal terms.
Crazy to see how fast institutions now move to Morpho to expand their financial infrastructure and reach new customers worldwide.
SG Forge, @societegenerale's regulated digital asset arm, has selected Morpho to power lending and borrowing for its MiCA-compliant stablecoins, EURCV & USDCV.
This is the beginning of an inevitable shift: banks are coming onchain and Morpho will be their universal backend.
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We’re finally reaching the long-awaited moment when crypto begins to detach from speculation. Enterprises are now adopting it as an infrastructure upgrade — a way to deliver cheaper, better financial products — not just a volatile trading product.
As crypto continues to decorrelate from speculation and align with real, organic adoption, the momentum will compound:
- Regulators will grow increasingly open-minded as they see tangible value for consumers.
- Consumers will feel safer and more confident to engage.
- Top talent will be inspired to build in the space as they see the impact they can make on the world!
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People always tell me I should tweet more, as most crypto founders do.
But
1- We reached $500m with 10k followers.
2 - Idk what to say.
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Morpho's RWA markets have grown insanely recently, from $0 to $300M in 3 months.
Read @MerlinEgalite's RWA playbook to join the party and make your RWA productive on Morpho.
Just published the Morpho RWA Playbook, or how to make tokenized RWA productive on Morpho.
Like stablecoins, RWAs are not going to sit idle.
Read more below 👇
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After two years of building in DeFi, I have become so bearish on complex protocols.
If a contract is feature-oriented, then it is a product, not an actual protocol.
The simpler the primitive is, the better.
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Spent a month in NYC at the end of this year.
We made five killer hires onsite.
I am soooo excited rn.
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Recent events have illustrated well how risk curation has been externalized on Morpho.
Late last week, Usual made multiple announcements that significantly impacted the price of USD0+. Each risk curator reacted differently, and tbh, I was quite impressed with how they handled the situation. To my knowledge, none has taken any loss.
Gauntlet: nitter.app/gauntlet_xyz/status/18…
Steakhouse: nitter.app/SteakhouseFi/status/18…
MEV: nitter.app/MEVCapital/status/1878…
As a reminder, Morpho is a permissionless and neutral infrastructure that allows users to opt into vaults, markets, and risk configurations set by third-party curators. Morpho’s design enables infinite customization of risk profiles while isolating risks, ensuring that issues in one market do not impact others. Notably, during these recent events, all other markets and vaults remained completely unaffected.
It is important to note that risk-free opportunities do not exist in DeFi. Where there is a reward or APY, there is always an associated risk. Morpho offers builders and users the capacity to tailor that risk to their needs.
For more on Morpho's architecture and design philosophy, check out this great post from @tarungupta1475: nitter.app/tarungupta1475/status/…
Morpho Protocol : The separation of risk is not a bug - it's a feature.
The recent USD0++ depeg situation has sparked some debate about lending protocols and their responsibilities.
Let's use this moment to understand something important: how Morpho's architecture actually helps prevent, rather than enable, market instability.
Morpho is a minimalist lending protocol (~650 lines) that separates lending mechanics from risk management.
Each market has just five parameters (loan token, collateral token, oracle, LLTV, IRM).
The protocol itself never changes - all risk management is external. When things go wrong in one market, it stays contained in that market. No governance control, no hidden parameters, no surprises - just clear rules that everyone can see and no one can change.
The Usual Protocol Situation: A Clear Example of Separated Responsibilities
What Actually Happened
1. USD0++ was designed as a 4-year commitment token
2. Built-in price impact for early exits was part of the design
3. Artificial price stability was created through external mechanisms such as hard coding the price to 1 usd.
4. Leverage was built on this artificial stability
Key Distinction
The issues arose not from Morpho's design, but from decisions made at the risk management layer.
This separation of concerns is not a bug - it's a feature.
Understanding Morpho's Architecture
The Core Innovation: True Separation of Concerns
Think of Morpho like the TCP/IP of lending - a base layer protocol that:
- Has clear rules
- Never changes
- Can't be upgraded
- Doesn't play favorites
All in just ~650 lines of code. That's not an accident - it's by design.
Permissionless Market Creation
Every market in Morpho needs just five things:
1. Loan token (what you're lending)
2. Collateral token (what you're backing it with)
3. Oracle (how you price it)
4. LLTV (when you get liquidated)
5. IRM (how interest rates work)
That's it. No hidden parameters. No governance tricks. What you see is what you get.
Why This Matters for Users
When you use a Morpho market, you know:
1. Exactly what can trigger a liquidation
2. Precisely how prices are determined
3. Specifically how interest accumulates
4. Who's responsible for what
No surprises. No hidden gotchas.
How Morpho Handles Risk
1. Market Independence
Each market stands alone. Problems in one market can't spill over to others. This means:
- No cross-collateralization surprises
- No hidden correlation risks
- No contagion between markets
2. Transparent Liquidations
The liquidation formula is public.
This ensures:
- Fair liquidation prices
- Clear liquidation triggers
The Role of Risk Managers
Think of risk managers like DeFi's credit analysts.
- Create markets with appropriate parameters
- Choose suitable oracles
- Set proper LTVs
- Monitor market health
Why External Risk Management Works
- Multiple strategies can compete
- Best practices emerge naturally
- Innovation isn't controlled by governance
- Users can choose their risk level
The Power of Clear Design
What Makes Morpho Different
- Immutability
- Core protocol never changes
- No governance surprises
- Parameters stay fixed
Conclusion
Recent market events don't show a weakness in Morpho - they demonstrate its strength. By clearly separating protocol mechanics, Risk management (external layer) & User decisions (your choice)
The system makes responsibilities clear and risks explicit. This isn't just better architecture - it's better DeFi.
Disclaimer: This article explains Morpho's architecture and design philosophy. Always DYOR and understand the risks of any DeFi protocol you use.
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Maker DAO is proposing to ramp up its usage of Morpho’s lending infrastructure from $100m to $600m.
Many tweets on Maker's move, but a lot of misunderstanding too.
Let me briefly recap what is happening👇
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I love the EF's recent push to test new things. However, publicly using specific DeFi protocols could be a mistake.
Neutral infrastructure empowers all builders equally. When some builders receive preferential vetting, it widely discourages new/small players from participating.
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pls stop creating telegram groups with "name1 <> name2". "name1 - name2" is much cleaner and more efficient.
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Today we are incredibly excited to announce that @gemini launches Gemini Invest, powered by Morpho on @arbitrum.
13 million Gemini users can access onchain yield seamlessly through integrated passkeys and wallet abstractions.
🦋👇
The new @gemini Wallet launches with access to Morpho.
This integration gives millions of Gemini users the ability to earn onchain via Morpho.
Available today.
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The grind really never stops...
Flying to Denver today!
Will be going to our Morpho x @gauntlet_xyz Happy Hour on Friday. Hit me up if you want to chat there!
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I have met 50+ of the best engineering leaders in the industry over the past 4 months.
Tarik was not only clearly the strongest but also an instant fit for Morpho’s culture.
Thrilled for him to become Morpho’s Head of Engineering to take our team to the next scale!
im thrilled to announce im now head of engineering @MorphoLabs 🦋
ive spent most the last 7 years in defi (fun fact - my first startup was built on @compoundfinance) and im as bullish on morpho as i am @Uniswap.
why morpho is inevitable and what i’ll be focused on 🧵
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Maybe now is a good time to resurface one of Morpho's open source repo: "Safer"
Very useful tool that helps you sign & submit transactions to a Safe, without requiring any interaction with Safe's backend or frontend👇
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One consistent feedback we get from people joining Morpho from other crypto projects is that the intensity and pace are at another level.
Morpho is a demanding place to work at, but very rewarding. We are hiring for pretty much all positions if you are interested!
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Morpho flipped Compound in borrowing volume!
Two and a half years ago, we were writing the first lines of code for Morpho's Compound optimizer. Now, Morpho has $900m borrowed and Compound $860m.
We have come a long way.
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We are entering a phase where Crypto in large entreprises shouldn't be a product vertical but a horizontal function across teams.
Beyond speculation, crypto isn't a product—it's infrastructure, invisible to users yet that empowers other products.
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Morpho Labs designed three entirely new lending protocols over the last year.
However, we were only partially satisfied with each of them, so we abandoned all three.
After months of endless research and debates, we finally converged on Morpho's upcoming lending primitive.
🟦
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Unpopular opinion: I love the current CT; so quiet, less bs/noise.
In contrast, every team is actually building like never before.
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Introducing The Morpho Stack.
Not Monolithic, Not Modular, But Aggregated.
📝 Full article: morpho.mirror.xyz/eSlZ0IzDN6…
🧵 Recap thread below
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Who keeps feeding all the LLMs with "on-chain"? This drives me crazy.
We need someone to remove the hyphen from all the training datasets.
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1/ Today, we are releasing the whitepaper and the code of 𝗠𝗼𝗿𝗽𝗵𝗼 𝗕𝗹𝘂𝗲 🟦.
A new trustless lending primitive that enables a whole new level of efficiency and flexibility.
1/ Today, we unveil Morpho Blue 🟦
A trustless lending primitive that offers unparalleled efficiency and flexibility.
It will serve as a new base layer for decentralized lending.
github.com/morpho-org/morpho…
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Underappreciated how diverse the Morpho curation game builders have become, and this is only with Morpho V1.
With Morpho V2, curators will have orders of magnitude more flexibility to differentiate and compete.
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Morpho reaching $10B 1.5 years after deployment is a great achievement.
But with the attention crypto has received from major TradFi players in the last months, it feels like a drop in the ocean.
Proud of the team, but we're still orders of magnitude behind.
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this is the crypto entreprise sales moment where we all move from telegram groups to slack connect and emails
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The Morpho App v2 is going to be the best UX we have ever seen in all DeFi. And it won't be even close.
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I’ve got immense respect for @haydenzadams and the @Uniswap team.
For years, people harshly criticized their entity/asset setup, assuming bad intentions—when in reality, they simply couldn’t act or explain yet. They took the hits quietly and still delivered a durable, aligned solution.
Looks like Uniswap is joining Morpho in the cabal of teams that truly believe in tokens and just focus on that :).
Today, I’m incredibly excited to make my first proposal to Uniswap governance on behalf of @Uniswap alongside @devinawalsh and @nkennethk
This proposal turns on protocol fees and aligns incentives across the Uniswap ecosystem
Uniswap has been my passion and singular focus for the past 8 years. What started as a small side project is now global financial infrastructure powering thousands of applications with ~$1.8 trillion in annual trading
UNI launched in 2020, but for the past 5 years Labs has been unable to meaningfully participate in Uniswap governance, and has been greatly restricted in the ways it can build value for the Uniswap community. That ends today!
This restriction was in great part due to a hostile regulatory environment that cost thousands of hours and tens of millions in legal fees. Fortunately, the regulatory environment has shifted
This proposal comes from a strong desire to see the Uniswap protocol win as the global decentralized exchange for tokenized value
At a high level, the proposal:
1. Turns on protocol fees and uses them to burn UNI
2. Sends @unichain sequencer fees to the UNI burn
3. Burns 100M UNI from the treasury representing the protocol fees that could have been burned if fees were turned on at token launch
4. Introduces Protocol Fee Discount Auctions, a new way to improve LP outcomes and internalize MEV to the protocol
5. Introduces "aggregator hooks” which will turns Uniswap v4 into an onchain aggregator that collects protocol fees on external liquidity sources
6. Focus Labs on driving protocol growth and adoption, including a contractual agreement to only pursue initiatives that align with Uniswap governance interests
^ As part of this, Labs will stop collecting fees on its interface, wallet, and API to supercharge distribution and adoption of the Uniswap protocol
7. Moves Foundation employees to Labs with a shared goal of accelerating protocol growth, under a growth fund from the treasury
8. Move governance-owned Unisocks liquidity to v4 on Unichain and burn the LP position
I believe Uniswap protocol can be the primary place tokens are traded. This proposal sets the stage for the next decade of its growth
@Uniswap will ship relentlessly over the coming years and supercharge the ecosystem of developers, LPs, and traders building on top
I'm so grateful to the community that has made this all possible, and excited for what's next
🦄
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Today, we release Bundler3, an open-source contract that lets users batch any actions in one click, with any wallet they may have (including EOAs).
This will simplify interactions with any DeFi protocol, including the existing and upcoming contracts of the Morpho Stack.
🚢🦋
Introducing Bundler3
An open-source smart contract that enables EOAs to execute a sequence of arbitrary calls atomically, including actions requiring approvals or callbacks.
Now available as a public good.
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In 10 years, nothing will have changed in this picture, except maybe an additional “1” in front of the “4”.
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Despite two major volatility shocks last month, Morpho saw the smallest loan outflows across all lending protocols — alongside our friends at Maple.
While I generally avoid comparing Morpho to other lending protocols (since they manage assets while Morpho is infrastructure for asset managers), it’s great to see how resilient Morpho’s growth remains!
Credit to @tokenterminal for the data.
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Today we introduce the World mini-app that will bring onchain lending and borrowing to their 25 million users.
Expect very cool and unique features like better rates for humans.
🌎🦋
Introducing the @MorphoLabs Mini App on World App: bringing lending, borrowing and rewards to 25M users, including priority rewards for humans (only possible on World).
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Blows my mind the number of random people I meet daily that are using Morpho, typically through the @worldnetwork / @coinbase / @cryptocom / @Gemini app. Morpho TVL more than 10x since last summer, but the number of users 200x
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After discussing DeFi risk management @EthCC the whole week, I don't think people realize how critical, opaque, and centralized it is currently.
This is really worrying; I should write about it someday.
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School Project: Those last 13 days, we built a cross-platform messaging app using @iotatoken (rgpd friendly thx to encryption)
We’ll shortly be building the desktop version!
If some of you are interested, I can publish an English version on stores -> let me know :) #IOTA #btc
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There's an intriguing moral paradox in Pavel's arrest, and it is, to me, all about ownership.
Car manufacturers aren't arrested because criminals use their car. However, Pavel was arrested because criminals used his app.
I see a lot of people, including me, feeling bitter about this arrest and worried about what it means for their personal privacy and freedom.
Yet, it's widely considered immoral to remain passive when one has the direct ability to prevent immoral actions, especially serious offenses like child exploitation.
If Telegram's technology had been decentralized to the point where Pavel clearly couldn't influence what was happening on the platform, it's unlikely anyone would attempt to arrest him or accuse him of anything.
Why? The owner is the one accountable, and Telegram still retains ownership of our conversations.
(Disclaimer: While I'm not familiar with the technical details, it appears that the platform is highly centralized.)
One owns its car, but one doesn’t (yet) own its conversations.
IMO, true freedom of speech can only be achieved through genuinely decentralized protocols where the speech is "owned" by the users.
I'm optimistic that 1- we can address this issue in the coming years and 2- this progress should ensure that no one ever questions the accountability of builders again, just as no one questions those who developed HTTP, RSS, etc.
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When Morpho Optimizer, Morpho’s first protocol, reached PMF, many urged us to launch the MORPHO token.
At the time, I strongly opposed this idea. Despite becoming a multi-billion dollar protocol, we lacked a clear path to truly disrupt lending in defi and beyond.
Now that Morpho (Blue) has also achieved PMF, and there are no foreseeable scaling limits to this model, I'm excited for the MORPHO token to become transferable on Thursday!
$MORPHO preparations complete.
Transferability will be enabled on Thursday, 21 November.
Read the full announcement below.
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The amount of support I am getting from Morpho's investors such as @a16z or @variantfund is completely crazy.
Is it the same in web2 (or other industries)?
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