Paris-based startup Morpho Labs raised €1.2 million in late 2021 to accelerate its growth. This young company counts more than thirty investors worldwide, in addition to Business Angels, Semantic Ventures and Nascent participated in this round. The funding will allow Morpho Labs to develop its Morpho protocol for decentralized, not-for-profit finance.

Paul Frambot, a student in Blockchain at Telecom Paris and Polytechnique, was taking classes with Vincent Danos, research director at CNRS. He attended a class explaining how blockchain could eliminate intermediaries in the field of finance, student and professor then exchanged for months before launching the Morpho project. Last summer, Paul Frambot created Morpho Labs, a company that develops open-source and innovative blockchain software, with Hugo Danet (HEC-Telecom Paris), Mathis Gontier-Delaunay (Telecom Sud Paris) and Merlin Egalité (Centrale Supélec).

Decentralized finance or DeFi

Morpho offers financial services but is innovative in the sense that it is non-profit and benefits the user above all. Thanks to the blockchain, it is autonomous, transparent and decentralized.

No one owns the protocol, everyone can contribute to it and be rewarded for their participation. Morpho Labs contributes to the Morpho protocol and will therefore be rewarded by the Morpho community. It allows to generate interest on these digital assets and to borrow them, paying interest. A DeFi platform like Morpho is hosted on a blockchain, run by its users and seeks above all to serve their interests: a new model that contrasts with traditional finance.

The blockchain

The Morpho protocol relies on the use of a Blockchain such as Ethereum, which allows for the creation of easily verifiable smart contracts by users and allows everyone to earn interest and borrow digital assets efficiently without having to rely on a trusted intermediary. Merlin Equality, in charge of contract programming explains:

“Once deployed on the blockchain, the code written by Morpho Labs, visible to everyone, is no longer dependent on us. Even if we wanted to delete or modify it, we couldn’t. In fact, a user is assured that their financial transactions will be completed as intended, without the intervention of a trusted third party.”

‘The Morpho protocol is designed as a commons for users and brings them the best interest rates for saving digital assets. Like any software system, it needs cash to maintain and update its algorithm but cannot really make a profit. Its users have the option of using the cash flow to improve the protocol or to cover certain costs and then ask Morpho Labs to perform services. Today, four companies worldwide are already contributing to the Morpho protocol and many more are expected to join the venture. Paul Frambot stated:

“This is a radical change in business model compared to traditional finance. Contributors such as Morpho Labs are not paid to operate a financial service but to help improve it. The social virtues of blockchain are still very much unknown but they are immense.”

Morpho Labs has developed several functional prototypes of Morpho since its creation. This fundraising will enable it to release a first full version of Morpho, including auditioning its code by various IT security companies or recruiting new developers.

Translated from Morpho Labs, société de logiciels blockchain open-source, a réalisé une levée de fonds de 1,2 millions d’euros