In the past, we judged whether a DeFi protocol was good or not based on TVL and APY. But Morpho is telling me that what matters more in the future is 'integration' and 'developer experience.' Recently, I've been looking at Morpho's GitHub and developer documentation, and I discovered a 'killer feature' that the market has severely underestimated: Morpho Bundlers.
This thing is the key to quickly signing Deblock (a European savings product) and Lemon (an Argentine wallet) as 'outside the circle' partners.
What is a 'Bundler'?
How painful is it for us retail investors to interact in DeFi? Taking 'circular leverage' as an example:
Approve WETH (a transaction)
Supply WETH (a transaction)
Borrow USDC (a transaction)
Go to 1inch to exchange USDC for WETH (a transaction)
Return to Morpho, Supply the exchanged WETH (a transaction)
...
These five steps incur outrageous gas fees and the experience is extremely fragmented.
Morpho Bundlers (such as EthereumBundlerV2 contracts) are 'atomic' executors. They allow developers (or users) to package all these operations into a 'set of instructions' and then send them to the Bundler contract 'in one go'.
The Bundler will execute all operations 'atomically' for you: Approve -> Supply -> Borrow -> Swap -> Supply... If any step fails (like slippage being too high), the entire transaction 'rolls back'.
From 'DeFi protocol' to 'Stripe for Lending'.
This 'bundler' combined with their newly launched SDK (software development kit) changes its significance.
For Lemon, a wallet application in Argentina, its users do not understand what 'lending' means at all. They just want to provide users with a 'high-interest savings in dollars'.
The developer of Lemon does not need to study the underlying logic of Blue; he just needs to call the Morpho SDK and send a 'bundle' instruction: 'Help me convert the user's ARS (peso) to USDC on DEX, and then automatically deposit it into a certain MetaMorpho Vault to start earning interest.'
All complexities are shielded by the SDK and Bundler. Morpho has become a 'B-end API service', an infrastructure for 'lending as a service'. It plays the role of 'Stripe (a payment SaaS)'.
I now believe that Morpho's moat does not lie in the design of Blue (Aave V4 is copying it), nor in the yields of MetaMorpho (there will always be new competitors).
Its core moat lies in: it is embedding its lending functions into hundreds of wallets, exchanges, and fintech applications' backends with the best 'developer tools' (SDK + Bundlers).
When your user base does not come from DeFi's existing players but from European banking apps and South American payment wallets, you have won. This is a 'parasitic', exponential growth. It is much more clever than competing with Aave for TVL.
@Morpho Labs 🦋 Labs 🦋
