Variant’s vision is that crypto enables a more equitable internet—one in which users can become owners. DeFi is the financial infrastructure that makes that vision possible. Decentralized financial protocols facilitate the productive allocation of capital and make the tools of finance permissionlessly available to the broadest possible group of users. At Variant, we invest in novel, ambitious projects that expand the capabilities of DeFi, extend its benefits, and strengthen its foundations.

Morpho is one of the leading examples of a project that we believe fits all of these criteria. Morpho is a lending protocol. It enables users to lend, borrow, permissionlessly create isolated lending markets, and build products (such as risk-managed vaults) on top of immutable, decentralized infrastructure. In its v1, Morpho unlocked economic efficiency for both borrowers and lenders by introducing peer-to-peer matching through Morpho Optimizer. Subsequently, Morpho released Morpho Blue, a lending protocol with breakthrough design innovations that enable it to bring the benefits of lending markets to an even broader set of assets and users. And Morpho Blue is more than just a lending market: it is general infrastructure that can bring the benefits of decentralized finance beyond the existing bounds of DeFi.

Variant co-led Morpho’s seed round in 2022 because we were inspired by the team’s vision and believed in the project’s transformative potential. Today, we’re excited to announce our investment in Morpho’s latest round. We’re even more excited about the project now than when we made our original investment.

Since 2022, the team has in every respect exceeded our high expectations. Through a bear market, they built and scaled not one but two products that found PMF. They’ve demonstrated that it’s possible to build general infrastructure that pulls forward the future of decentralized finance while meeting the needs of the market as it exists today. Along the way they’ve contributed thought leadership to the space and consistently demonstrated a fervent commitment to the fundamental values of DeFi.

Morpho is meeting important user needs—that is clear from the data. The project has achieved total assets supplied of $2.7 billion and total capital borrowed of $1.05 billion. In the 6 months since its launch, Morpho Blue has been enthusiastically embraced by lenders, borrowers, and curators. There are currently more than 25 vaults built on Morpho Blue, operated by curators including analytics companies, funds, and DeFi protocols. The range of vaults and curators demonstrates how Morpho’s infrastructure brings together a dynamic ecosystem and powers a diverse set of products.

Looking ahead, we see the potential for further growth along many dimensions. There is plenty of room for Morpho Blue to grow by adding new curators, vaults, and markets—further expanding the breadth and quality of choices for users.

We are especially excited about Morpho as general infrastructure. Morpho can power DeFi as it grows and matures. Morpho can also bring the benefits of its permissionless lending market infrastructure beyond the current boundaries of DeFi—to fintechs and traditional finance. The scale of activities that can be facilitated by Morpho’s infrastructure is enormous, and the potential for Morpho to benefit users is equally large. 

It’s still so early for Morpho. We’re incredibly excited about the opportunities ahead and grateful to have the chance to invest in this extraordinary project and team. To learn more about Morpho, navigate to Morpho.org and be sure to check out the opportunities to get involved at jobs.morpho.org.