Written by Christina Combenstaff writerReviewed by Yohan Yunstaff writer

Written by Christina Combenstaff writer

Reviewed by Yohan Yunstaff writer

Morpho’s $175M raise shows where crypto VC money is flowing

Latest NewsPublishedJun 13, 2026

Morpho’s recent $175 million raise reflects growing investor bets on onchain credit infrastructure as stablecoin adoption expands.

Investors are increasingly backing stablecoin and credit infrastructure rather than decentralized finance (DeFi) lending alone, with Morpho Labs’ latest funding round drawing attention to onchain credit markets, as reported by Spark CEO Sam MacPherson.

Morpho revealed Tuesday that it raised $175 million in a round led by Paradigm, a16z crypto and Ribbit Capital. While Morpho is widely known as a DeFi lending protocol, the company stated that it aims to become a credit infrastructure layer for banks, asset managers and fintechs.

Onchain credit markets allow users and institutions to borrow, lend and deploy capital using blockchain-based assets. Investors are betting the sector will grow alongside stablecoins and other tokenized financial products.

As stablecoins scale, “credit becomes one of the most crucial pieces of infrastructure in the stack,” MacPherson told Cointelegraph.

Related: DeFi protocol Radiant to wind down after failing to recover from 2024 hack

Morpho’s growing role as lending infrastructure

Morpho has a total value locked (TVL) of $6.72 billion and about $3.47 billion in active loans, as reported by DeFiLlama data. Risk management platform Sentora stated in a Friday newsletter that the figures indicate “notable liquidity depth.”

Morpho’s total value locked and active loans have climbed sharply since late 2024.Source: DeFiLlama

Sentora also pointed to Coinbase’s utilize of Morpho smart contracts to originate more than $2.17 billion in corporate USDC loans as evidence that the protocol is being used as lending infrastructure rather than solely as a retail DeFi platform.

Sentora argued that the trend extends beyond crypto-native lending. The firm stated exchanges, custodians and asset managers are actively evaluating blockchain-based lending systems to power credit products, while protocols compete to become the underlying infrastructure for business-to-business integrations.

Capital flows to late-stage crypto firms 

Morpho intends to measure the success of the raise 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 to drive adoption, co-founder Merlin Egalite told Cointelegraph.

“The problem we are trying to solve is less about replacing competitors and more about establishing ourselves as the credit infrastructure layer that banks, asset managers and fintechs build on,” he stated.

Morpho’s raise “largest” in DeFi history. Source: Merlin Egalite

The funding round, which Egalite called “the largest raise in DeFi history,” comes as venture capital increasingly concentrates on a small group of established crypto infrastructure projects.

as reported by a Q1 2026 report by CryptoRank, capital allocated to Series C and later-stage crypto funding rounds surged 1,020% year over year and 320% quarter over quarter. The category accounted for 28.4% of venture funding across just nine deals, while seed and pre-seed funding fell 38.1% and represented only 5.2% of total capital.

Egalite stated that he is unconcerned about capital concentration.

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Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

• DeFi
• Funding
• Institutions
• Lending
• Industry

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