DeFi Protocol Morpho Labs Raises $18m

DeFi protocol Morpho Labs has secured $18 million funding, co-led by Andreessen Horowitz (a16z) and Variant.

Around 80 investors participated in this round of funding, including cryptocurrency venture capital such as Coinbase Ventures, Standard Crypto, the construction industry, and cryptocurrency advisors as well as founders.

Spencer Noon, the general partner from investor Variant Fund, sees great promise for a decentralized lending protocol that could raise high-value loans in the billions of dollars. However, the issue of price competitiveness remains to be improved.

“Morpho is a brand new type of lending primitive that directly matches suppliers and borrowers and sits directly on top of lending pools like Aave and Compound, unlocking rates that are competitive both on and off-chain. If successful, we believe it has the potential to become a go-to coordination layer of a new global and decentralized financial system.”

Morpho is a Peer-to-Peer (P2P) layer on top of lending pools like Compound or Aave. It improves the capital efficiency of AAVE or Compound while maintaining the same liquidity and risk guarantees.

Morpho provides optimized loan options to users. It has introduced a lending protocol that uses a P2P approach that combines Compound or AAVE liquidity pool models with order books.

In the weeks since Morpho-Compound went live, it has accumulated $30 million in liquidity, the company said.

And Morpho-Aave will launch in the next few weeks.