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Morpho Labs Secures $175 Million to Expand On-Chain Credit Infrastructure
Morpho Labs, a DeFi lending network built on Ethereum and other EVM‑compatible chains, announced on Tuesday that it has raised $175 million in a strategic funding round. The round was led by Paradigm, a16z crypto and Ribbit Capital, with participation from IOSG Ventures and HashKey Capital. The company issued convertible preferred shares, and the transaction values Morpho at up to $2 billion post‑money.
The funding comes as investors shift focus from retail DeFi lending to infrastructure that supports stablecoins and institutional credit. According to Spark CEO Sam MacPherson, stablecoins are growing and “credit becomes one of the most important pieces of infrastructure in the stack.” Morpho’s stated goal is to become a credit layer that banks, asset managers and fintechs can integrate.
At the time of the announcement, Morpho’s total value locked (TVL) was $6.72 billion and it had about $3.47 billion in active loans, according to DeFiLlama data. Sentora, a risk‑management platform, noted in a Friday newsletter that these figures indicate significant liquidity depth. The newsletter also highlighted that Coinbase is using Morpho smart contracts to originate more than $2.17 billion in corporate USDC loans, suggesting the protocol is already being used as lending infrastructure beyond retail DeFi.
The round is described by co‑founder Merlin Egalite as “the largest raise in DeFi history.” Egalite said the company will measure success over the next 12 to 18 months by expanding integrations with banks, asset managers and large platforms, attracting more institutional capital and rolling out features from traditional credit markets.
The size of Morpho’s raise reflects a broader trend in crypto venture capital. A Q1 2026 report by CryptoRank shows that capital allocated to Series C and later‑stage crypto funding surged 1,020 % year‑over‑year and 320 % quarter‑over‑quarter. These deals accounted for 28.4 % of venture funding across just nine transactions, while seed and pre‑seed funding fell 38.1 % and represented only 5.2 % of total capital.
Investors in the round are among the most active in the crypto infrastructure space. Paradigm, founded by Coinbase co‑founder Fred Ehrsam, manages $12.7 billion in assets and has a portfolio that includes high‑profile projects such as Uniswap and Coinbase Ventures. a16z crypto, a division of Andreessen Horowitz, has a history of backing both early‑stage and growth‑stage crypto companies. Ribbit Capital, a fintech‑focused venture firm, has invested in companies such as Robinhood and Coinbase.
Morpho’s positioning as a credit infrastructure layer aligns with the increasing use of blockchain‑based assets for borrowing, lending and capital deployment. The protocol’s open‑source nature allows businesses to create customized lending markets, and its integration with major custodians and exchanges indicates a path toward broader institutional adoption.
As of now, Morpho has secured the largest single funding round in DeFi history, and its TVL and loan volume continue to grow. The company plans to leverage the capital to deepen institutional partnerships and expand its credit‑market features. The broader crypto ecosystem is witnessing a concentration of capital in late‑stage infrastructure projects, a trend that may shape the next wave of institutional engagement.
The outcome of Morpho’s expansion will be closely watched by market participants, as it could signal a shift toward more regulated, credit‑oriented use of blockchain technology and a move away from purely retail DeFi lending models.
The funding comes as investors shift focus from retail DeFi lending to infrastructure that supports stablecoins and institutional credit. According to Spark CEO Sam MacPherson, stablecoins are growing and “credit becomes one of the most important pieces of infrastructure in the stack.” Morpho’s stated goal is to become a credit layer that banks, asset managers and fintechs can integrate.
At the time of the announcement, Morpho’s total value locked (TVL) was $6.72 billion and it had about $3.47 billion in active loans, according to DeFiLlama data. Sentora, a risk‑management platform, noted in a Friday newsletter that these figures indicate significant liquidity depth. The newsletter also highlighted that Coinbase is using Morpho smart contracts to originate more than $2.17 billion in corporate USDC loans, suggesting the protocol is already being used as lending infrastructure beyond retail DeFi.
The round is described by co‑founder Merlin Egalite as “the largest raise in DeFi history.” Egalite said the company will measure success over the next 12 to 18 months by expanding integrations with banks, asset managers and large platforms, attracting more institutional capital and rolling out features from traditional credit markets.
The size of Morpho’s raise reflects a broader trend in crypto venture capital. A Q1 2026 report by CryptoRank shows that capital allocated to Series C and later‑stage crypto funding surged 1,020 % year‑over‑year and 320 % quarter‑over‑quarter. These deals accounted for 28.4 % of venture funding across just nine transactions, while seed and pre‑seed funding fell 38.1 % and represented only 5.2 % of total capital.
Investors in the round are among the most active in the crypto infrastructure space. Paradigm, founded by Coinbase co‑founder Fred Ehrsam, manages $12.7 billion in assets and has a portfolio that includes high‑profile projects such as Uniswap and Coinbase Ventures. a16z crypto, a division of Andreessen Horowitz, has a history of backing both early‑stage and growth‑stage crypto companies. Ribbit Capital, a fintech‑focused venture firm, has invested in companies such as Robinhood and Coinbase.
Morpho’s positioning as a credit infrastructure layer aligns with the increasing use of blockchain‑based assets for borrowing, lending and capital deployment. The protocol’s open‑source nature allows businesses to create customized lending markets, and its integration with major custodians and exchanges indicates a path toward broader institutional adoption.
As of now, Morpho has secured the largest single funding round in DeFi history, and its TVL and loan volume continue to grow. The company plans to leverage the capital to deepen institutional partnerships and expand its credit‑market features. The broader crypto ecosystem is witnessing a concentration of capital in late‑stage infrastructure projects, a trend that may shape the next wave of institutional engagement.
The outcome of Morpho’s expansion will be closely watched by market participants, as it could signal a shift toward more regulated, credit‑oriented use of blockchain technology and a move away from purely retail DeFi lending models.
