Interview with Morpho Co-Founder and CEO: Building a More Flexible Infrastructure for DeFi Innovation, the Chinese-Speaking Community's Influence Cannot Be Underestimated
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Interview with Morpho Co-Founder and CEO: Building a More Flexible Infrastructure for DeFi Innovation, the Chinese-Speaking Community's Influence Cannot Be Underestimated
Let's explore the growth story of Morpho, a leading lending platform, and its new journey of project development following the transformation of its financial infrastructure.
Navigating Web3 tides with focused insightsAuthor: TechFlow
Success comes early.
This saying seems particularly fitting for the crypto industry:
In 2013, 19-year-old Vitalik Buterin published the Ethereum whitepaper in Toronto;
In 2017, Hayden Adams, who had graduated less than two years prior, completed the initial version of Uniswap;
In 2021, a sophomore student from Paris launched Morpho, which went on to secure two funding rounds in 2022 and 2024, raising over $80 million cumulatively. After three years of development, Morpho has become a formidable force in the DeFi space: According to DeFi Llama data, Morpho's TVL surpassed $4.43 billion, ranking fourth among lending protocols.
He is the protagonist of our exclusive interview today: Paul Frambot, Co-Founder and CEO of Morpho Labs.
Recently, the activation of transfer functionality for Morpho’s governance token MORPHO sparked widespread community discussion. We were fortunate to have an in-depth conversation with Paul. As a rising star in the industry, Paul demonstrated maturity far beyond his age during our exchange.
On Morpho’s transformative shift this year from a lending product to financial infrastructure, Paul stated:
DeFi needs not only specific products but also flexible, scalable, and high-performance financial infrastructure to better meet diverse user demands and compliance requirements.
Facing rapid growth following its deployment on Base, and amid community curiosity about future cross-chain expansion plans, Paul responded:
We believe we shouldn’t and won’t be the sole decision-makers for Morpho’s future. Community participation will shape the future of Morpho’s cross-chain deployments.
Regarding the Chinese-speaking community, Paul candidly shared:
The power of the Chinese-speaking community cannot be underestimated—Asia is a key focus for our growth.
In this feature, let’s follow Paul’s insights to explore the journey of Morpho, a leading player in DeFi lending, and its new chapter after transitioning into financial infrastructure.
Morpho’s Narrative Upgrade: From Lending Product to Financial Infrastructure
TechFlow: It's great to have the opportunity for an in-depth discussion. To start, could you introduce yourself (feel free to share your educational background, experience in crypto, entrepreneurial journey, and how you came to join Morpho)?
Paul:
Hello everyone, I’m Paul Frambot, Co-Founder and CEO of Morpho Labs. I'm thrilled to have this opportunity to engage deeply with you all.
Three years ago, while studying distributed computing and consensus in Paris, I co-founded Morpho. From the beginning, I focused on two areas: entrepreneurship and blockchain—both of which I believe hold immense potential to reshape industries.
Over the past few years, I’ve been dedicated to startup ventures, experimenting with various ideas and business models. While these early endeavors didn’t immediately succeed, they provided invaluable experience and taught me how to build impactful products. At the same time, I’ve been deeply involved in blockchain technology since I was 15. By 19, I developed a profound understanding of this transformative field. Combined with my passion, I gradually recognized a significant opportunity within DeFi—especially in lending.
I believed the interest rate spread represented a fundamental inefficiency we could address. This idea led me to collaborate with researchers to design an algorithm capable of bridging this gap.
From there, I began assembling a team, brought on co-founders, and raised funding to turn this vision into reality. Three years later, Morpho now stands at the forefront of solving some of DeFi’s most pressing challenges.
TechFlow: A frequently discussed topic in the community is Morpho’s announcement this year about evolving from a lending product into financial infrastructure. Many are curious: what considerations drove this narrative upgrade? And what specific changes has it brought to Morpho?
Paul:
The earliest version of Morpho was a product called Morpho Optimizer, built on top of Aave, aiming to improve Aave’s interest rates. For us, Morpho Optimizer served more as a guiding principle and a market entry strategy—an approach that pushed us to build a stronger Morpho protocol offering something better than existing solutions.
During development, two critical realizations emerged:
First, our growth was constrained because we operated atop Aave. Despite managing $2 billion in assets, our trajectory remained tied to Aave’s growth, which correlates closely with broader crypto market capitalization—limiting our own potential.
Second, we faced challenges related to security and flexibility. Building on Aave meant dealing with frequent smart contract upgrades, which disrupted integrations and destabilized the system. For example, a recent upgrade (v3.2) broke many integrations built on Aave, forcing rollbacks of certain changes.
These issues prompted our transformation. We realized that DeFi requires not just individual products, but flexible, scalable, and high-performance financial infrastructure to serve diverse user needs and compliance standards.
By building such a platform—enabling others to create customized financial solutions—we can not only solve current limitations but also lay the foundation for the next wave of innovation in DeFi.
TechFlow: Observing DefiLlama data, Morpho’s TVL surged from $2 billion to $3.1 billion in the past month. Could you share what happened during this period? What do you see as the main drivers behind this growth?
Paul:
My TVL figures are even higher now (at the time of writing, Morpho’s TVL reached $4.43 billion, according to DeFi Llama).
Morpho’s growth over the past year has been remarkable, driven by three key factors:
First, the builders within our ecosystem have been exceptional—they’ve secured new partnerships, attracted capital, and accelerated adoption faster than anyone anticipated. Their work strongly demonstrates Morpho’s potential to become a foundational pillar in DeFi.
Second, the launch of the Morpho token was a pivotal moment. It placed Morpho in the spotlight, significantly increasing global brand visibility. Exchanges with millions of followers also amplified our story. The token launch acted as a major catalyst for boosting Morpho’s profile across the entire crypto ecosystem.
Finally, the broader market environment is improving. We’re seeing substantial capital inflows, exciting news, and innovative developments—all of which naturally benefit projects like Morpho operating within this space.
Strong Lending Fundamentals: Morpho’s Core Appeal to Users
TechFlow: Many believe DeFi lending is a sector dominated by giants. How do you view this perspective? As the fifth-ranked lending project on DefiLlama, what advantages enabled Morpho to break through in this competitive landscape?
Paul:
Established players in DeFi have maintained dominance for good reasons. The Lindy Effect plays a crucial role—the longer something exists without failing, the longer it is expected to last. Veteran projects inspire greater trust because they’ve stood the test of time.
Another key factor is the static capital held by legacy DeFi projects. For instance, MakerDAO benefits from billions of DAI that remain largely untouched, giving it leverage to create new financial opportunities.
In contrast, Morpho’s unique vision sets us apart: we’re not just another custodial product; we’re building permissionless, decentralized infrastructure designed for scalability. This strategy closely resembles Uniswap’s, positioning us as a foundational layer for other developers. By focusing on superior flexibility, scalability, and performance, we don’t merely compete with DeFi giants—we aim to expand what’s possible in DeFi.
TechFlow: Liquidity is the lifeblood of DeFi, yet increasing fragmentation presents a major headache for many lending protocols. How does Morpho tackle this challenge?
Paul:
To understand Morpho’s approach, we must first define liquidity in the context of lending: it refers to the amount users can withdraw or borrow at any given time.
At first glance, Morpho’s markets may appear highly fragmented, with assets like USDC spread across multiple collateral pools. However, we’ve introduced two mechanisms to address this:
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Morpho Vaults: Designed to aggregate liquidity across multiple markets. For example, depositing USDC into Vaults managed by Gauntlet or Steakhouse allows users to benefit from combined liquidity across associated lending markets.
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Allocator Function: A vital mechanism for borrowers that dynamically rebalances liquidity in real-time, ensuring large sums are available when needed.
Together, these mechanisms reduce fragmentation and enable more efficient capital flow—forming a core competitive advantage for Morpho.
TechFlow: Permissionlessness is one of Morpho’s standout features. In what ways is this reflected, and what does it bring to the evolution of lending?
Paul:
Making Morpho permissionless was a strategic decision that has already yielded significant benefits. Strong permissionless design enables us to externalize risk management, scale resources efficiently, and allow third parties to build directly on the protocol.
While we haven’t yet seen many novel use cases emerge, we believe permissionlessness holds tremendous potential to fuel Morpho’s long-term success. It lays the groundwork for an innovative ecosystem where entirely new financial products can eventually be built atop Morpho’s infrastructure.
TechFlow: Lowering user entry barriers is important, but attracting users becomes the bigger challenge. For average users, what do you consider the greatest appeal of participating in Morpho? And how can they participate more effectively?
Paul:
Morpho employs a layered architecture to serve diverse user needs. For example, if you're a user unfamiliar with risk management, you can use Morpho Vaults—a dedicated risk management layer. If you want to batch transactions, we offer smart contract bundlers to streamline the process.
This tiered structure ensures Morpho delivers greater flexibility, allowing users to engage in lending and yield generation based on their personal circumstances and preferences. Users can select collateral types, define risk profiles, and minimize exposure according to their own needs.
One of Morpho’s standout strengths is its ability to combine capital efficiency with security. We’ve built a protocol that offers higher returns, reduced smart contract risks, and greater flexibility—all without incurring the operational costs carried by many competitors.
TechFlow: Security is paramount for any DeFi protocol. According to the Morpho Analytics page, total deposits currently exceed $2.8 billion. With such a massive asset base, what concrete measures has Morpho taken to safeguard user funds?
Paul:
Security has always been one of Morpho’s strongest pillars. We’ve undergone approximately 30 audits—the most, possibly, in the DeFi space. Moreover, our approach to smart contract security differs fundamentally from other projects.
From day one, we prioritized code minimalism. Every function in the Morpho core protocol is essential, while additional features like liquidation protection or account abstraction are built externally—keeping the core clean, simple, and secure.
We also maintain a formal verification process. To my knowledge, Morpho is the only DeFi protocol with an internal formal verification team. Some of our team members hold PhDs in this field and use tools like Certora, Halmos, and Why3 to ensure our contracts are provably secure and robust.
By designing with formal verification in mind from the outset, we’ve achieved unparalleled security in DeFi. Our commitment to simplicity and safety is precisely what sets Morpho apart and establishes us as a leader in DeFi security.
Growth Surge After Base Deployment: Next Cross-Chain Moves Will Be Community-Driven
TechFlow: A few months ago, Morpho announced its deployment on Base. Could you share why Base was chosen?
Paul:
When we decided to deploy on Base, it wasn’t yet the widely recognized chain it is today. However, several key factors influenced our decision.
First, the strong brand power of Coinbase, Base’s backer. Not only does Coinbase provide significant global market exposure, but we also benefit from their excellent security practices and talented team. This made betting on Base feel like a sound decision.
Second, the tooling ecosystem around Base has consistently impressed us. Their developer kits and on-chain tools are practical and well-designed, giving us confidence in both Base’s future and our integration with it. I believe this infrastructure will become a core component of the DeFi ecosystem.
Finally, conversations with the team played a key role. Speaking with founder-minded individuals like Jesse and learning about their compelling vision further strengthened our belief that Base would thrive as an ecosystem.
So far, deploying on Base has proven to be a wise choice. It hasn’t diverted too much of our attention, yet it has delivered very positive outcomes. We’re extremely satisfied with the results.
TechFlow: Morpho is now one of the largest lending protocols in the Base ecosystem, adding over 53,000 new wallets since launching there. Given this win-win precedent, does Morpho have plans for further multi-chain expansion?
Paul:
Indeed, many teams have expressed strong interest in cross-chain deployment. We’re committed to hosting open and collaborative discussions on social media and forums around this topic.
We believe we shouldn’t and won’t be the sole decision-makers determining Morpho’s next steps. We plan to actively encourage stakeholders to post proposals and discussions on our forum. This way, the broader community can participate in shaping the future of Morpho’s cross-chain expansion.
In recent months, the volume of requests for new chain deployments has been incredible—clearly reflecting high expectations for Morpho’s cross-ecosystem growth.
TechFlow: With BTC surpassing the $100,000 mark, BTCFi is gaining increasing attention. Given Bitcoin’s massive capital base, unlocking Bitcoin liquidity is highly attractive for any DeFi project. What actions has Morpho taken regarding this ‘golden vault’ of BTCFi?
Paul:
Although the Morpho treasury does not hold Bitcoin—since we need to pay salaries, operational expenses, and fund network development, most of which are still settled in fiat (though we hope to move everything on-chain soon)—our treasury consists primarily of USD, EUR, and cash equivalents, avoiding volatile assets.
However, within the Morpho protocol itself, we’re seeing growing interest in Bitcoin-related strategies. For example, vaults developed by Gauntlet and RE7 have explored ways to generate yield on cbBTC or wBTC. These vaults aim to provide lending services for Bitcoin restakers (such as LBTC and other forms of restaked BTC), helping them earn enhanced yields—an exciting growth area for both Morpho and DeFi.
TechFlow: RWA is another hot topic in this cycle, seen as a key driver for DeFi’s penetration into the real world. What’s your outlook on RWA’s development prospects? And what strategic moves has Morpho made in this area?
Paul:
In my view, RWA represents DeFi’s largest growth frontier—but it also brings challenges. Integrating RWAs into permissionless systems is difficult because these assets often require permissions, such as whitelisted contracts and integrations.
We’ve been tackling these challenges by developing account abstraction tools that make it easier for users to wrap and unwrap reward-bearing assets directly through the Morpho protocol. Once whitelisted, the process becomes seamless—requiring no additional transactions—and greatly improves the overall experience for both developers and users.
Morpho Market is a vivid example, accepting verUSDC (USDC restricted to wallets verified by Coinbase) and LTF (Anemoy Liquid Treasury Fund) as collateral. Morpho’s institutional-grade, frictionless user experience enables KYC-compliant lending on fully permissionless infrastructure.
As we continue to resolve developer experience hurdles and as crypto borrowing rates stabilize or decline, we expect interest in RWA to grow significantly. Currently, high crypto rates make it hard for RWA to stand out, but I believe that with these positive shifts, RWA holds enormous potential.
Chinese-Speaking Community Power Is Real: Smoother User Experience On the Way
TechFlow: It was reported that Morpho enabled MORPHO token transfers on November 21. Why was the MORPHO token initially deployed as non-transferable? What considerations led to enabling transfers now? And what was the process like in transitioning from non-transferable to transferable?
Paul:
The Morpho token was originally launched two years ago as non-transferable. This allowed us to distribute tokens to the community while staying focused on building a better protocol, free from distractions associated with liquid tokens.
During our transition from Morpho Optimizer to Morpho Blue, we aligned the token with our long-term mission. Once the protocol reached maturity and our vision became clearer, we moved forward to make the token transferable. This milestone isn’t just about tokenomics—it’s about empowering the community with ownership and enabling them to more actively contribute to Morpho’s development alongside us.
TechFlow: As we enter Q4 of 2024, an unavoidable topic is the election and upcoming inauguration of crypto-friendly president Donald Trump. Interestingly, Trump’s team recently announced a lending project called World Liberty Financial (WLF). On this topic, could you share your thoughts on the future of crypto regulation? Will Trump’s presidency usher in a new era for crypto? And what are your views on WLF?
Paul:
Due to limited information, I don’t have strong opinions on regulatory matters or projects like World Liberty Financial. While there’s optimism that regulation could benefit the crypto industry, Morpho remains focused on building infrastructure capable of adapting to any regulatory environment.
TechFlow: The Chinese-speaking market is a vital part of the crypto ecosystem. Could you share your understanding of the Chinese-speaking crypto market, and what expansion strategies does Morpho plan to pursue in this region?
Paul:
Yes, although we initially underestimated the strength of the Chinese community, we’ve come to recognize its size and the immense value it brings to the crypto market.
Over the past year, we’ve taken deeper steps to expand in Asia and the Chinese-speaking market—including visits to Singapore and Bangkok, and hiring team members with regional expertise.
To me, the power of the Chinese-speaking community is unmatched. We’ve also received an incredibly warm welcome. I’m excited to continue building relationships and expanding our presence in this market. Asia is a key priority for us, and I believe its potential is enormous.
TechFlow: Final question: 2024 is entering its final stretch. What will be Morpho’s primary focus over the next few weeks?
Paul:
I can’t reveal too much, but recently we’ve been intensely focused on rebuilding the Morpho application from the ground up to deliver a best-in-class user experience. We’re reimagining everything—from backend to frontend—to make the platform more intuitive and scalable.
At the same time, we’re doubling down on forging partnerships and growing our network. Getting more people to use Morpho is our top priority, and I hope we can inspire participation from the Chinese community.
Learn More:
Website: morpho.org
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