Morpho’s $175M DeFi Round Tests Onchain Credit’s Future

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, according to Spark CEO Sam MacPherson. Morpho [announced](https://morpho.org/blog/morpho-association-raises-175m-to-build-the-open-credit-network-for-the-world/) 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 said 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 important pieces of infrastructure in the stack," MacPherson told Cointelegraph. _**Related:**_[_**DeFi protocol Radiant to wind down after failing to recover from 2024 hack**_](https://cointelegraph.com/news/defi-protocol-radiant-to-wind-down-after-failing-to-recover-from-2024-hack) Morpho has a total value locked (TVL) of $6.72 billion and about $3.47 billion in active loans, according to DeFiLlama data. Risk management platform Sentora said in a Friday newsletter that the figures indicate “significant liquidity depth.” _Morpho's total value locked and active loans have climbed sharply since late 2024.Source:_[_DeFiLlama_](https://defillama.com/protocol/morpho?fees=false&borrowed_tvl=true) Sentora also pointed to Coinbase's use 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. Source: Merlin Egalite_ The funding round, which Egalite [called](https://x.com/MerlinEgalite/status/2064318636567810368) “the largest raise in DeFi history,” comes as venture capital increasingly concentrates on a small group of established crypto infrastructure projects.