The $200 Trillion Credit Market Is Moving Onchain. Morpho Is Building the Rails.

**Paul Frambot** (0:00)
You know, to me, crypto as a product is just speculation. Like crypto should not be a product. Crypto is infrastructure. I mean, the infrastructure is the product, not crypto in and of itself, right? The infrastructure is the blockchain, is the computer upgrade, the server upgrade that we're going to provide, right? And so I genuinely think that it is not here to revolutionize finance in and of itself. It's here to revolutionize financial infrastructure. So, you know, it's the same risk, like the same bar as the same lenders.

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**Sam Ewen** (1:10)
Hey, this is Sam Ewen with CoinDesk Spotlight. We're here with Paul Frambot from Morpho.
Morpho has been making a lot of noise out in the industry over the last bunch of months, so we thought it would be a great idea to have Paul on and kind of tell us what's going on. Paul, welcome to the show. Excited to have you here.

**Paul Frambot** (1:26)
Hey, thanks for having me.

**Sam Ewen** (1:27)
Yeah, pleasure. Let's just dive in. Morpho describes itself as an open credit network. What does that really mean for the everyday person?

**Paul Frambot** (1:36)
I think the everyday person should understand this as when you want to borrow, you need to find a lender, and when you want to lend, you need to find a bar. Morpho allows you to connect with the entirety of lenders and bars on Earth, which allows you to get better terms. That's the world point of moving on chain. That's the world point of Morpho. It's like you have some ambitions, and you want to get some financing to fund those ambitions as a bar.
Well, instead of going to a single bank that will give you a given pricing, you go to Morpho, and Morpho will connect you with 10,000 banks, asset managers, individuals, and we get all of them to compete for you, and they'll give you the best possible terms, and to have deeper liquidity. You'll have, if no one was willing to underwrite you when you went to the bank one by one, maybe in the Morpho open credit network, because everything is open, people will underwrite you. So you get better terms, and in some cases, you have terms, because many people today in the world don't have access to credit, and because the system will be open, it'll be able to connect you. And that works the other way with lenders as well. So that's what we define as the open credit network for the world.

**Sam Ewen** (2:47)
Perfect explanation. When I think of some of other crypto protocols, the Aaves and Compounds of the world, what makes you different?

**Paul Frambot** (2:53)
Yeah. So Aave is a bank. Morpho is infrastructure for banks. When you deposit your money on Aave, you trust them to manage the money well, to upgrade the smart contracts.
They do asset management on chain basically, and they underwrite some bars, some Bitcoin bars. Sometimes they do it well, sometimes they underwrite the wrong assets as we've seen a few months ago. And in the case of Morpho, we don't do any of that. We're just purely the plumbing, the connecting layer that's going to connect lenders with bars. So we just provide the pipes.
And you have on Morpho thousands and thousands of different credit markets where people can lend and borrow on various things. We don't get to decide who is here to lend or who is here to borrow. Anyone can come in and build markets. But that's great because it's super flexible and we can address any credit use case. The downside, though, is that there is a lot, right? And so this is why we invented what we call vaults, right? Which are basically a structure that allows for players to route through all this complexity and aggregate different credit markets into a single non-custodial savings product, right? So if you're a user that does not fully want to care about the details of how to underwrite each and every single user, you can go through a vault, basically, that will handle this complexity for you.

**Sam Ewen** (4:18)
I've noticed you mentioned being kind of the pipes of the industry. Infra on crypto and blockchain is really having a moment, which I think is great timing for you.