8 min de lectureMorpho has rapidly emerged as one of new heavyweights in the crypto ecosystem, showing that Aave is no longer the only successful credit protocol in the industry. In less than five years, it has become one of DeFi’s core lending infrastructures, now partnering with several industry leaders.
Built on Ethereum, Morpho provides a permissionless, non-custodial, and customisable infrastructure for on-chain lending. It enables users to earn yield, borrow assets, and create bespoke lending markets with flexibility and security.
Unlike traditional pool-based lending protocols, Morpho uses an optimised matching engine that pairs lenders and borrowers directly whenever possible, aiming to improve rates for both sides. When no match is available, user funds are redirected to a base lending pool, ensuring continuous liquidity and predictable behavior even in volatile markets. This hybrid design is central to Morpho’s appeal, as it combines efficiency, transparency, and seamless integration with existing DeFi liquidity.
Today, it is the world’s second-largest lending protocol, with over $6,68 billion in TVL. It has firmly established itself as one of the dominant forces in decentralized lending within the broader DeFi landscape.
How it started
Morpho was founded in August 2021 in Paris by three students: Paul Frambot, Mathis Gontier Delaunay, and Merlin Egalité.
During his studies, Paul Frambot took blockchain courses at Télécom Paris and Polytechnique, taught by Vincent Danos, a research director at CNRS. Fascinated by the idea that blockchain could eliminate intermediaries in finance, he spent months discussing these concepts with his professor. Those conversations eventually led to the creation of the Morpho project.
“This represents a radical shift in business models compared to traditional finance. Contributors such as Morpho Labs are not paid to operate a financial service but to help improve it. The social benefits of blockchain are still largely unknown, yet they are immense,” Frambot told ActuIA in 2022.
The idea quickly attracted investors: the team raised €1.2 million at the end of 2021, followed by an $18 million round in July 2022 led by the prestigious venture firms a16z Crypto and Variant. Nearly one hundred investors participated, including Coinbase Ventures and French funds such as Alven and XAnge.
Morpho launched on mainnet on December 20, 2022, and has raised more than $69 million to date, with its most recent funding round completed in August 2024.
The MORPHO token
The MORPHO token was launched on the Ethereum network on November 21, 2024. Its supply is capped at 1 billion units, with 358.3 million tokens in circulation as of November 18, 2025, which represents around 36% of the total supply.
Its primary function is to act as a governance token, allowing holders to vote on decisions related to the protocol, its future upgrades, and treasury management. A threshold of 500,000 tokens is required to submit a proposal, ensuring that initiatives come from participants who are significantly invested in the ecosystem.
The token is also used to reward users who participate in lending and borrowing activities on the platform.
The tokenomics are designed to support the protocol’s development, with 35.40% of tokens allocated to the Morpho DAO treasury and 6.30% to the Morpho Association. The founders hold only 15.20%.
The players using it
Morpho has become a key piece of infrastructure for lending products across the crypto industry, powering services for major exchanges, payment platforms and even regulated financial institutions.
Rather than interacting with Morpho directly, most users access it through familiar, consumer-facing interfaces, a model often described as the “DeFi mullet,” where centralized platforms sit in front while decentralized rails operate behind the scenes.
One of the most prominent integrations is with Coinbase, which in January launched Bitcoin-backed on chain loans on the Base network using Morpho. Through this product, users can borrow USDC against their Bitcoin. On November 20, Coinbase also announced the addition of Ethereum-backed loans, with borrowing limits of up to $1 million.
Crypto.com is also integrating Morpho into its ecosystem. In partnership with Cronos network, the two teams are preparing to launch new stablecoin lending markets backed by wrapped versions of Bitcoin and Ethereum on the Cronos chain, with deployments expected before the end of the year. They are also exploring the use of wrapped real-world assets as collateral, another step toward bridging traditional assets with DeFi-powered liquidity.
Morpho’s expansion now reaches into traditional finance as well. In late September, Société Générale (via its digital-asset subsidiary SG-FORGE) announced the integration of its MiCA-compliant stablecoins (EURCV and USDCV) into Morpho. This move could enable institutional clients to access on-chain lending markets using a basket of crypto assets and tokenized funds as collateral. It represents one of the first large European banks to use an open DeFi lending protocol at scale.
Risks and perspectives
Like any protocol, Morpho remains exposed to exploit attempts and security incidents. In April 2025, the protocol faced a $2.6 million attempted exploit linked to a frontend vulnerability. The attack was halted in real time by the white-hat MEV operator c0ffeebabe.eth, who intercepted the malicious transaction before any funds were lost.
Even more worrying for observers, concerns over liquidity resurfaced recently after temporary shortfalls were detected in a handful of vaults.
Co-founder Merlin Egalité addressed the situation in a post on X published on November 6, explaining that these episodes were a predictable reaction to market stress rather than a structural weakness. When lenders withdraw simultaneously and utilisation reaches 100%, Morpho’s interest-rate model automatically raises borrowing costs to support balance. Most markets typically return to normal within minutes, though periods of intense volatility can slow the process. According to Egalité, only three to four of Morpho’s more than 320 vaults were affected by these brief episodes, and none resulted in losses or bad debt.
Looking ahead, several open questions remain, especially regarding the long-term role of the MORPHO token. For now, its utility is primarily governance-related, while most institutional integrations rely on Morpho as backend infrastructure without requiring the token.
