Decentralised lending protocol Morpho has raised $175 mn in new funding, signalling continued investor appetite for DeFi infrastructure despite recent shocks across the sector.
Morpho, which lets users create isolated lending markets, described the round as one of the largest funding raises for a DeFi platform. Before this financing, the protocol had raised $68 mn across two earlier rounds.
The platform now holds $11 bn in user deposits. Morpho has helped popularise curated lending vaults, which work similarly to funds and let risk managers define how user capital is allocated across different crypto-backed lending markets.
Paradigm and Andreessen Horowitz, through a16z, co-led the round alongside Ribbit Capital. Morpho said the financing also attracted strategic backing from Apollo Funds, Circle Ventures, and VanEck, with more than a dozen other firms participating.
Leading exchanges including Coinbase and Binance have adopted the protocol. Their customers use Morpho-linked products to earn interest on stablecoins such as Circle’s USDC and Tether’s USDT, or borrow against digital assets such as Bitcoin and Ethereum.
The raise arrives after several DeFi incidents tested confidence in decentralised lending and trading platforms. Aave faced a liquidity crisis after an exploit affecting KelpDAO, while Drift suffered a suspected $285 mn theft linked to a North Korean hacking group.
Morpho said French banking group Société Générale is already building on its platform. The protocol wants to become a shared credit layer that lets banks, asset managers, and fintechs build programmable lending products.
“The true value of finance has always been held back by dated infrastructure,” said Morpho co-founder Paul Frambot. “We’re building the open credit network for the world, connecting those with excess capital to those who need financing, globally.”
Morpho plans to use the new funding for infrastructure development and commercial integrations with strategic partners. Before this round, Coinbase had already backed the company and used the protocol to restart its Bitcoin-backed lending programme early last year.
Morpho liquidates borrowers when collateral values fall below required thresholds. In those cases, third-party buyers purchase the collateral at a discount, creating losses for borrowers whose positions move past risk limits.
Coinbase’s Morpho-linked lending platform has recently recorded higher user losses. Bitcoin’s decline to a 19-month low triggered liquidations for about 2,900 Coinbase customers over the past week, according to a Dune dashboard.
When liquidations reached record levels in February, Coinbase told Decrypt that users receive frequent warnings when their loans approach danger levels. The exchange said those alerts arrive as often as every 30 minutes.
According to Beinsure analysts, Morpho’s $175 mn raise shows venture investors still see credit infrastructure as one of DeFi’s strongest institutional use cases.
The opportunity sits in programmable lending, exchange distribution, and stablecoin yield products. The risk sits in collateral volatility, liquidation design, smart-contract exposure, and whether traditional financial firms treat open credit rails as infrastructure or regulatory headache.
