In 2005, Mark Zuckerberg made his dream come true with Facebook thanks to an initial investment granted by the Accel Partner fund. It had only been a year since he left Harvard and moved to Silicon Valley. Prize pool amount: $12.7 million. A record for a student project.
Seventeen years later, two Frenchmen have done better. In the shadow of French Tech, Paul Frambot, who studies Blockchain at Télécom Paris-Polytechnique, embarks with CNRS research director Vincent Danos to create Morpho. In less than 18 months, they develop a protocol in which more than 100 investors have allowed him to get up $18 million. Their application has only been active for a month.
“Morpho has the potential to become essential”
To bring together so many venture capital investors, reputable funds were needed. And for once, in the world of decentralized finance, Morpho could not find more prestigious than Andreessen Horowitz (A16z) and the Variant fund. Coinbase Ventures, from the crypto exchange platform of the same name, also trusted the two French people.
To give you an idea, Paul Frabot is only 21 years old. His project, he launched it during his third year of study in the prestigious French school and could prove essential for the ecosystem of cryptocurrencies and DeFi. Morpho is a DAO (Decentralized Autonomous Organization) that has developed an optimization protocol for better manage lending activity on Compound and Aave cryptocurrency exchanges.
Lending is a booming activity for cryptocurrencies, adding a banking dimension in a decentralized system. With the Morpho protocol, the guarantee of being able to lend cash in exchange for an interest rate. An essential process so that DeFi projects can be financed without going through fiat currencies. We therefore understand the whole issue of the technology of the two Frenchmen.
“There is a big rate gap between what lenders are offering and the rate at which borrowers can actually get a loan”, noted Paul Frabot in a press release. The protocol is an algorithm that directly manages peer-to-peer rate negotiation. “In the future, rather than selling your company shares to finance a project, you can use them as collateral and borrow ethers or stablecoins”added Paul Frabot.
Aave and Compound naturally evolve on the Ethereum Blockchain, and Morpho’s product builds on it as well. In all transparency, the two Frenchmen say that they have no plans to release income on cash flowing through on their application (already more than 30 million dollars in one month). But in the future, “the day the community decides, we will apply fees”said the student. “Morpho has the potential to become essential” ended up saying a representative of the American fund Variant.
At a time when centralized cryptocurrency exchanges (CeFi) like Coinbase and Celsius are in very difficult situations in terms of financial health, the crypto world has never put DeFi in the spotlight. It is therefore not for nothing that, like many players, Morpho has managed to raise capital. Promising.