Paul Frambot, CEO of Morpho Labs, recently sat down for an interview with Cryptonews to discuss the future of decentralized finance (DeFi). Frambot shared insights on various topics, including liquid staking, the next evolution of DeFi spending, the shift from app to infrastructure, and the role of DAOs in managing protocol risk.
During the interview, Frambot revealed how he and his co-founders managed to raise millions for Morpho Labs while still in university. They identified areas for improvement in DeFi lending and used their connections in the industry to secure funding from investors such as Andreessen Horowitz and Variant.
Frambot discussed the concept of DeFi 2.0, which involves moving from app-based protocols to infrastructure-based protocols. He explained that earlier protocols like Maker, Uniswap, Aave, and Compound were self-contained and user-friendly but lacked scalability. To overcome this limitation, Morpho Labs took a minimalist approach and divided their protocol into two parts: risk management and the protocol itself. This layered approach allows for scalability and avoids the complexities of a monolithic pool.
In contrast to the current trend of expanding into various areas of DeFi, Morpho Labs has chosen to focus solely on lending and borrowing. Frambot emphasized the importance of being laser-focused and doing one thing extremely well. This approach has allowed Morpho to stand out in the market and attract over $2 billion in deposits.
Regarding DAOs, Frambot expressed his belief that they may not be the best option for managing protocol risk. He explained that effective risk management requires expertise and the ability to make quick decisions, which DAOs may struggle with. However, he acknowledged that the market will ultimately determine the success of DAO-based risk managers.
Overall, Frambot’s interview provided valuable insights into the future of DeFi and showcased Morpho Labs’ unique approach to protocol development. With their minimalist approach and focus on lending and borrowing, Morpho Labs is poised to make a significant impact in the DeFi space.
