Having written so much analysis on Morpho, from the partnership with JPM to the bad debts of MEV Capital, to the RWA script and V2 intentions, I have been pondering what the Morpho team's 'endgame' really is.
Putting together these clues (Coinbase SDK, JPM settlement, RWA platform, V2 intentions), the answer is already very clear: Morpho never intended to be a 'better Aave.'
Its ambition is to become a 'B2B (Business to Business) financial infrastructure empire.' It is the 'Stripe' of the lending sector (payment giant).
'Deconstructing the bank' - Morpho's core philosophy.
Aave is an 'integrated bank' that is 'small but complete'. It is responsible for itself (DAO):
Attract deposits/find loans (Origination, marketing)
Set interest rates/set LTV (Risk Management)
Manage the capital pool (Balance Sheet)
Morpho's core philosophy is 'unbundling'. It believes that having 'one' unified DAO do these three things is extremely inefficient and full of political games.
Thus, Morpho has 'disassembled' it and established a 'freely competitive market' for each layer:
Balance Sheet Layer (Blue): Morpho has made this layer the most 'dumb' and 'neutral'. The Blue contract is immutable and has no governance. It's just a 'ledger' and 'settlement layer'.
Risk Management Layer (MetaMorpho): Morpho has outsourced 'risk control'. SteakhouseFi, Gauntlet (Aera), kpk-bots... these professional 'fund managers' compete in the MetaMorpho layer. Whoever has good risk control and high returns, the money from Lenders flows to them. This is 'the marketization of risk control'.
Customer Acquisition Layer (SDK/Integrators): Morpho has also outsourced 'customer acquisition'. Coinbase, Crypto.com, Lemon (Argentinian wallet)... they are 'B-end' customers, using Morpho's SDK to serve their own millions of C-end users.
Aave is 'Blackberry' - a complete hardware and software package, a closed system. Morpho is 'Android' - providing only an open-source system (Blue), and then letting 'Samsung' (Coinbase), 'Xiaomi' (Lemon), 'Qualcomm' (Gauntlet) play on top.
Strategic transformation from 'B2C applications' to 'B2B APIs'.
The earliest version of Morpho, V1 (Aave optimizer), was a 'B2C application'. It tried to 'steal retail investors' from Aave. To be honest, that product was not very successful because it was too 'complicated'.
The Morpho Labs team has clearly learned their lesson and made a 180-degree strategic shift. They realized that the true incremental growth of DeFi does not lie in seizing the existing 100,000 'DeFi veterans', but in serving the 1 billion people 'outside the circle'.
But these 1 billion people will never use morpho.org. They will only use Coinbase, Robinhood, Lemon, or JPM's bank app.
Therefore, Morpho's strategy has completely shifted from 'building dApps' to 'building APIs/SDKs'.
This is why Coinbase Lend and Crypto.com were able to integrate Morpho in just a few months. Because the Morpho team has focused all their efforts on 'developer experience'. The 'bundlers' they launched can allow Coinbase's backend to complete complex operations (exchange -> deposit -> interest calculation) with one click.
When your user clicks on 'Purchase 5% Current' in the Coinbase App, they have no idea they have 'passively' become a contributor to Morpho's TVL.
This is the success of Stripe (payment API). When you buy something on 90% of independent sites, you are using Stripe, but you are completely unaware of it. This kind of 'unconscious', 'embedded' finance is the ultimate goal.
The $50 million strategic financing that Morpho just secured at the end of October 2025, you can see the list of investors (like Coinbase Ventures), and you'll know that this money is meant to consolidate this 'B2B alliance'.
Morpho's moat is not the code of Blue (Aave V4 is copying it), nor the returns of MetaMorpho (there will always be new competitors). Its moat is: it is becoming the first 'API' called when all Fintech and TradFi giants enter DeFi lending. When JPM and Coinbase's systems are deeply 'embedded' with Morpho's SDK, this war will already be over.
#Morpho $MORPHO @Morpho Labs 🦋 Labs 🦋
