Would you rather be a distribution channel for traditional finance products, or own the entire product stack using decentralized financial (”DeFi”) infrastructure?

DeFi infrastructure empowers businesses to embed payment, trading, and lending offerings directly into their platforms at scale, without building from scratch, while having full control of the product and underlying financial stack.

Traditional financial rails let you package existing products. DeFi infrastructure lets you program new ones.

DeFi is a general term for providing financial services on blockchains

1. Blockchains: distributed ledgers serving as the open settlement layer for transactions
2. Smart contracts: blockchain-based code that carries out actions without the need for intermediaries
3. Tokens / Digital Assets – any asset (BTC, stablecoins, tokenized treasuries) that can be traded or transferred onchain
4. Wallets: accounts that allow users to manage assets and transact onchain

The current financial system is fragmented with siloed, incompatible systems, legacy infrastructure, manual processes, and high barriers to connection. This limits innovation, restricts access, and creates inefficiencies that prevent humans from realizing the true value of finance.

DeFi aims to solve this by connecting the financial system on a single open and shared backend.

The financial system today:

The financial system built on DeFi:

DeFi infrastructure gives enterprises direct control over financial products that would otherwise be impossible.

Instead of relying on countless intermediaries, inheriting counterparty risk, and having little to no pricing power, enterprises can now access financial markets through open, efficient, transparent, and easy-to-integrate protocols.

Global efficiency

Traditional finance is built on closed systems with fragmented liquidity and limited competition. DeFi infrastructure connects participants to a shared network where all access the same capital markets, aggregating supply and demand across geographies and platforms. More participants and deeper liquidity lead to better price discovery and better terms.

Products built on open infrastructure are fundamentally more efficient than those built on closed systems.

End-to-end ownership

When it comes to traditional financial products, most enterprises own distribution but not the product or pricing.

DeFi infrastructure inverts this model. Enterprises access financial markets directly through programmable protocols rather than through intermediaries. Instead of negotiating terms with counterparties, they define the product, control the economics, and own the full stack — from product to pricing to distribution.

Transparency

On a daily basis, most of finance is a black box. Users must trust monthly statements, audits, and counterparty disclosures to understand where funds are deployed and what risks they’re exposed to.

DeFi is transparent by default. Built on the blockchain, anyone and everyone has access to real-time visibility into every transaction, position, and exposure. Users can verify exactly where capital is allocated, track performance, and audit risk directly.

What required expensive audits and delayed reconciliation now happens automatically, continuously, and publicly.

Easy to integrate

Traditional finance integration requires building infrastructure from scratch and navigating complex relationships with banks, custodians, and asset managers — each with their own systems, legal agreements, and demands.

DeFi infrastructure works differently.

Enterprises leverage existing open-source tooling to integrate protocols directly, without the need for approvals or counterparties. What traditionally took 12-18 months to integrate is reduced to weeks (or even days if you’re fast).

Morpho is an open network that connects lenders and borrowers to optimal opportunities worldwide. Any enterprise, institution, or application can integrate Morpho to offer best-in-class lending and borrowing products directly within their platforms.

• Embedded earn products: give your users access to yield on any asset.
• Facilitate onchain loans: plug into global liquidity and offer users instant loans.
• Become a curator: design, implement, and manage scalable lending strategies.

Morpho’s is lending infrastructure has two distinct layers:

1. Morpho Markets: configurable lending markets that operate similarly to open-ended loans from which borrowers can access liquidity.
2. Morpho Vaults: programmable noncustodial model portfolios that consist of diversified allocation to different Morpho Markets that users can enter and exit at any time.

The high-level flow would look like the following:

1. Lenders deposit USDC into a Morpho vault
2. The vault allocates the USDC to one or more Morpho Markets set by the curator
3. Borrowers provide collateral, borrow USDC, and pay interest on the loan
4. Lenders earn yield from the interest
5. Lenders and borrowers can withdraw/repay instantly, whenever they’d like

One recent success of financial products powered by DeFi is the lending and borrowing product suite by Coinbase, powered by Morpho launched in early 2025.

In the short span of 8 months, $400M in USDC are lent via Coinbase, $1.3B in loans originated. This is the largest scale of a “DeFi Mullet” to date: fintech in the front, DeFi in the back.

Read the Coinbase story to learn more.

• Crypto-backed loans Coinbase launched BTC-backed loans (and subsequently ETH-backed loans) that give US-based Coinbase users access to USDC loans backed by their BTC and ETH holding. To date, $1.3B of loans have been originated via the Coinbase App.

• DeFi lend Coinbase launched DeFi Lending in September, allowing Coinbase users to earn yield on their USDC via USDC vaults curated by Steakhouse Financial.To date, $400M of USDC has been deposited via the Coinbase App.

• Building the Coinbase liquidity flywheel

On the lending side, Coinbase lenders deposit USDC into Steakhouse-curated vaults, providing sustainable liquidity for borrowing in addition to the USDC liquidity coming from other USDC vaults on Morpho.

On the borrowing side, Coinbase borrowers provide sustainable borrowing demand, often times used for expenses such as purchasing a house, pay for a car, pay for student debt or to get additional USD-denominated liquidity.

Another killer feature of this liquidity flywheel: Coinbase users can also benefit from lending and borrowing demand from other Morpho integrations such as Deblock, Spark, Moonwell and so on for the best rates onchain.

This creates a flywheel effect for Coinbase to grow both sides of its loan books without having to rely on legacy service providers or building its own lending product.

To learn more about successful examples of enterprises that are building on Morpho, check out: https://morpho.org/stories/