What exactly did Morpho do right to make the 'Big Three' of TradFi (traditional finance), CeFi (centralized exchanges), and DeFi (decentralized finance) enter the game simultaneously in just a few months (from October to November 2025)? This is extremely rare in DeFi history.
To be honest, this list is dazzling: JPMorgan deployed JPM Coin on the Base chain through the Onyx platform; the backend powerhouse of Coinbase's 'DeFi Lend' business (which has raised over 350 million) is Morpho; the Ethereum Foundation (EF) has put in real money (thousands of ETH and millions of stablecoins) into Morpho Vaults.
These three represent three distinctly different interests and risk preferences. Their ability to reach a consensus and choose the same infrastructure is no coincidence. Behind this is the comprehensive victory of Morpho's 'B2B infrastructure' and 'fine risk isolation' strategy.
Let's first discuss the first insight: Coinbase Lend — this is the victory of 'compliance' over 'modularity'.
We have to ask, why doesn't Coinbase build a lending protocol itself? Or why not use the 'authentic' Aave? Coinbase is a publicly listed company in the U.S., strictly regulated by the SEC. Its biggest fear in DeFi is not hackers, but 'compliance risk'.
Aave's 'unified' risk pool is a 'compliance nightmare' for Coinbase. The pool contains LINK, CRV, and various assets; DAO votes could anytime add a new asset that the SEC considers a 'security'. Does Coinbase dare to mix its American depositors' money with these 'high-risk' assets in one pool? It does not dare.
The design of Morpho Blue's 'segregated market' perfectly solves this problem.
Coinbase does not need to 'use' the entire Morpho. It can (I guess it is doing this) create a 'dedicated' MetaMorpho Vault with its partners (like Circle). This Vault can be hardcoded at the strategy level: only allowing investments in the 'Blue market with collateral of ETH and borrowing assets of USDC', and the LTV of this market must not exceed 80%, with the oracle being Chainlink.
Look, this is the power of 'modularity'. Coinbase has received a set of 'LEGO blocks', and it only took the three safest and most compliant pieces (ETH, USDC, Chainlink) to build its 'own' product. The risks of this product are controllable, predictable, and auditable. It turned Aave's 'big melting pot' into a 'customized sterile room'.
Morpho's SDK (Software Development Kit) and Bundlers make this process as simple as calling an API. Coinbase treats Morpho as its 'B-end backend', providing 'high-yield USD deposits' for its app users.
JPMorgan (JPM) — this is a victory of 'neutrality' over 'ecological niche'.
JPMorgan confirmed on November 12 that it would deploy JPM Coin on the Base chain, which is explosive news. What is JPM Coin? It is a 'private' stablecoin used for 24/7 settlements on JPM's Onyx platform. It chose the Base chain for its L2 efficiency and the settlement security of Ethereum.
But JPM Coin is just 'money'. 'Money' needs a place to 'earn interest' and 'leverage'.
JPM itself will not build another Aave on Base. It needs a 'neutral, immutable, permissionless' financial infrastructure. Morpho is just there.
This picture is very clear: JPM and its institutional clients will bring 'tokenized T-bills' onto the Base chain through the Onyx platform in the future. And then? They will immediately need a place to use these 'tokenized T-bills' as collateral to borrow JPM Coin for short-term turnover.
Will they use Aave? Will Aave's governance allow JPM's 'private assets' to go on-chain? How long will the voting process take?
Morpho Blue allows JPM (or its partners) to open a segregated market for 'JPM-TBILL / JPM-COIN'. They can set their own LTV and manage liquidity themselves. The characteristics of the Morpho protocol being 'immutable' and 'without governance' make it a 'neutral' platform that JPM can uniquely 'trust'. It is not an 'application'; it is a 'settlement layer'.
JPM will not 'use' Morpho; it will regard Morpho as part of the financial infrastructure of the Base chain.
Ethereum Foundation (EF) — this is a victory of 'technological orthodoxy'.
If the entry of Coinbase and JPM is driven by 'commercial interests' and 'compliance considerations', then the entry of the Ethereum Foundation (EF) is purely a 'technical endorsement'.
EF is the most conservative and least profit-driven 'sanctuary' in the DeFi world. Their funds (thousands of ETH and millions of stablecoins) were found to be deposited in Morpho Vaults in October.
What are they after? They are not after that little interest.
EF's core mission is to maintain Ethereum's 'security' and 'decentralization'. The prosperity of LSTs (liquid staking tokens, such as stETH) is crucial to Ethereum's 'PoS security'. And what does the LST ecosystem need the most? Efficient leverage.
Depositing into Morpho, especially in stETH/ETH related Vaults, is a strong 'signal'.
Signal One: They (EF's technical experts) audited and 'trust' the contract code of Morpho Blue.
Signal Two: They 'support' Morpho's efficient, low-risk (due to isolation) leveraged market for LSTs (Lido, Rocket Pool, etc.). This efficient leverage will in turn encourage more people to participate in PoS staking.
These three giants need one to be 'compliant', one to be 'neutral', and one to be 'secure and efficient'. Morpho's positioning of 'modularity' and 'B2B infrastructure' miraculously meets these three seemingly contradictory needs simultaneously.
Morpho wins, not because it is a few points cheaper than Aave, but because it has shifted from the mindset of 'making applications' to 'making platforms'. It is not building a bank; it is selling 'shovels' and 'railway construction' to everyone who wants to start a bank.
@Morpho Labs 🦋 Labs 🦋
