Morpho raises $175 million in round led by a16z crypto, Paradigm and Ribbit Capital

Morpho has raised $175 million in a funding round co-led by Paradigm, a16z crypto and Ribbit Capital, valuing the decentralized lending protocol at up to $2 billion as it deepens its push into institutional finance and steps up competition with Aave in onchain lending. Co-founder Merlin Egalite called it the largest raise in DeFi history. Apollo Funds, Circle Ventures, VanEck, Ledger Cathay, Variant, Wintermute Ventures, SBI Group and Bpifrance also participated. Co-founder Paul Frambot said investors bought Morpho's native tokens at their average monthly price, so entry prices varied across the round and produced a fully diluted valuation of as much as $2 billion. Morpho now has close to $6.5 billion in total value locked across 37 chains, according to DefiLlama, versus about $12 billion for Aave. The protocol lets users create lending markets with custom risk parameters, a model Morpho says has attracted users including Coinbase, Kraken, Binance, Anchorage Digital and Galaxy Digital. The Ethereum Foundation has also backed Morpho twice under its treasury framework, contributing 3,400 ETH and about $6 million in stablecoins. The Morpho Association said the new capital will be used to strengthen partnerships and build what it calls an open credit network. The funding arrives as Aave works through a 12-month revenue-led protocol strategy and promotes its V4 architecture after earlier governance tensions and exposure to the April 2026 KelpDAO exploit, which left Aave with substantial bad debt while Morpho's exposure was more limited.