Morpho secures $50M funding led by Ribbit Capital for onchain lending

Decentralized finance protocol Morpho Labs has raised $50 million in funding following a recent revamp of its business. 

The round was led by Ribbit Capital with participation from a16z Crypto, Coinbase Ventures, Variant, Pantera Capital, Kraken Ventures, and other investors. Morpho Labs had previously raised a total of $23.6 million across multiple funding rounds, including an $18 million Series B funding round a16z and Variant in 2022.

The funds will be used to support the recently launched Morpho Blue, a permissionless lending protocol that allows entities to create and manage their own markets without needing prior approval from any central authority. The solution also offers vaults that can be tailored with specific risk management parameters.

Morpho Blue has received more than $1.5 billion in deposits since its introduction nearly six months ago, according to data from Dune Analytics.

The protocol was launched in 2022, promising to maximize interest rates for users through Morpho Optimizer, an optimization layer on top of Aave and Compound. Since then, Morpho has transitioned from a single application into a set of purpose-built protocols that operate on top of a shared base layer, seeking to address the fragmentation within the Ethereum ecosystem.

According to data from DefiLlama, the protocol has borrowed more than $1.07 billion as of Aug. 1, generating over $27.3 million in fees. It currently supports nearly 160 pools with an average yield of 4.77%.

“We aim to build and support infrastructure that underpins a truly global, internet-native financial system, one that is trustless and opinion-free,” said Paul Frambot, CEO and co-founder of Morpho.

DeFi protocols are experiencing a surge in activity in 2024 as a result of the return of liquidity to crypto markets following the debut of Bitcoin exchange-traded funds in the United States. The total value locked onchain across protocols stands at $96.1 billion at the time of writing.