Blockchain-based lending protocol Morpho raised $175 million in a funding round co-led by Paradigm, a16z crypto, and Ribbit Capital, the company announced on June 9. The round also included participation from Apollo Funds, Circle Ventures, VanEck, and Ledger Cathay, marking one of the largest decentralized finance funding rounds to date. The raise signals renewed institutional appetite for onchain credit infrastructure, a sector that has grown significantly as traditional banks and asset managers explore blockchain-based lending alternatives. Morpho, which positions itself as an "open credit network," said it will use the capital to expand its institutional reach and deepen the compliance and custody layers underpinning its protocol. "We believe credit markets will move onchain," Morpho said in a statement. The protocol has crossed $11 billion in deposits and counts Coinbase, Binance, Kraken, Bitwise, Galaxy, and Anchorage among its institutional users, according to The Block. The funding arrives as decentralized credit protocols face increasing scrutiny over risk management, regulatory compliance, and institutional suitability. Unlike retail-focused DeFi platforms, Morpho has targeted sophisticated participants, offering permissioned access and structured products designed to meet institutional standards. That positioning appears to have resonated with investors who see onchain credit as an underserved market with significant growth potential. Circle Ventures, the venture arm of USDC issuer Circle, participated in the round, underscoring stablecoin infrastructure providers' interest in expanding the ecosystems where their tokens function as settlement and collateral assets. The involvement of Apollo Funds — the investment arm of alternative assets manager Apollo — suggests institutional credit players are exploring how onchain protocols might complement or compete with their existing platforms. Morpho's focus on credit infrastructure contrasts with the broader DeFi sector's emphasis on trading and speculative yield strategies. By targeting credit markets directly, the protocol is betting that institutions will increasingly use onchain rails for lending, borrowing, and liquidity management rather than building exclusively through traditional intermediaries. The raise comes as crypto markets face renewed pressure, with Bitcoin down roughly 27% year-to-date and institutional ETF outflows accelerating. Against that backdrop, the size of the Morpho raise — and the quality of its investors — signals that institutional capital remains committed to blockchain infrastructure even as near-term market conditions deteriorate.
