Morpho Founder: Revolut, Robinhood & eToro to Inject Life Into DeFi (Not Wall Street Giants Like BlackRock)
- Paul Frambot (founder of Ethereum-based lending protocol Morpho) believes that fintech companies (Revolut, Robinhood, and eToro) can revive the DeFi sector.
- Following DeFi's TVL dropping by 54% since its 2021 peak, he believes they're best suited to reshape and navigate the financial landscape.
- However, Wall Street giants also have a favorable crypto stance following the SEC's approval of $BTC and $ETH ETFs.
Forget Wall Street behemoths like BlackRock; fintech innovators like Revolut, Robinhood, and eToro will inject fresh vitality into DeFi, suggests Paul Frambot (Morpho founder and DeFi expert).
According to him, it's time for these major fintech titans to spin up financial infrastructure that caters to tech-savvy and innovative finance players.However, Wall Street giants also have a favorable crypto stance following the SEC's approval of the $BTC and $ETH ETFs. Who's best positioned to revive the DeFi market? Let's take a look.
Despite Major Industry Competition, DeFi TVL Drops 54%Frambot's insights are worthy of attention - he has hands-on experience with DeFi and understands it from the inside out.
He is a major player in the DeFi arena, launching Morpho (an Ethereum-based lending protocol that competes against Aave and Compound) during the 2021 bull market. His company has raised $77M from major capital firms like a16z and Ribbit Capital.The entrepreneur believesthe DeFi space is getting more competitive due to major industry players vying against one another.
Aave versus Maker, Maker versus Ethena - everybody's competing.Paul FrambotHowever,DeFi's total value locked (TVL) has plummeted by ~54% since its all-time high in November 2021, from ~$179B to ~$82B. When looking back at the market's top-dollar days, its current stance signals significant dwindling investor interest.
Per Frambot, one critical DeFi issue is that the market heavily relies on speculative investments (despite initially being created as a more transparent and efficient TradFi alternative). Owing to this, he calls the DeFi sector an artificial casino.'
The question is, How do we get from this artificial casino, bootstrapping phase to the broader message?Paul FrambotFrambot Foresees Major Fintech Firms Dominating DeFiFrambot is hopeful that leading fintech companies like Revolut, Robinhood and eToro can enhance DeFi's appeal for everyday mainstream users through innovative means.
Each of these firms embraces crypto as core pieces of their masterplansin the brokering and banking markets. Just yesterday, Revolut (valued at $45B and donning a UK banking license) announced its intention to issue its own stablecoin.
When considering the fiat-backed stablecoin market has grown by 35.4% from November 2023 ($119.1B) to August 2024 ($161.2B), this is a strategic move (though Revolut has yet to announce which type of stablecoin it will roll out).
The Morpho founder believes digital banks like Revolut have establisheda beachhead in the once impregnable domain of traditional banks.' However, gaining ground in payment processing has proven to be a challenge.
Fintechs must use the same outdated rails" as banks, remittance firms, asset managers, and other financial players. They plug into the traditional financial infrastructure, which has limitations. It's not efficient, it's not transparent, it's not resilient.Paul Frambot
Nevertheless, he believes such setbacks open DeFi opportunities and that fintechs get it.' Especially since they're already invested in Web3.
Revolut has a stand-alone crypto trading platform, Robinhood owns a self-custody crypto wallet, and eToro provides access to blockchain-based apps.
They're aggregating the order flow of finance, and now they can become the owners themselves of the financial infrastructure.Paul Frambot
Fintech vs TradFi - Who's Got a Better Crypto Position?Despite the positivity surrounding fintech's DeFi potential, there's an aspect that can't be ignored: TradFi players' current favorable crypto stance.
Major Wall Street giants like BlackRock and Fidelity are now deep in the weeds of Web3 after receiving SEC approval to launch spot $BTC ETFs on January 10. $ETH ETFs followed six months later. According to Bloomberg's analyst, these ETFs have helped save $BTC's price from the abyss.'
TradFi firms like PayPal and Deutsche Bank's DWS now also issue stablecoins.
However, mainstream finance entities' crypto positions receive a mixed bag of reviews. Some believe they can help unbanked populations across the globe, while others think they're hindering one of the blockchain's greatest perks - decentralization.
In light of these facts, we believe that DeFi's future ultimately hinges on the ability of fintech and traditional financial institutions to innovate and safely navigate the blockchain's constraints. All while ensuring transparency, efficiency, and user-friendliness.
ReferencesClick to expand and view sources
- DeFi Dashboard - Total Value Locked (DeFiLlama)
- Fintechs like Revolut and Robinhood hold the key to DeFi's growth, says Morpho founder (DeFiLlama)
- State of Stablecoins: 2024 (CoinGecko)
- Revolut launches Revolut X, a stand-alone crypto trading platform for experienced traders (Revolut)
- Robinhood Crypto Wallet (Robinhood)
- Eric Balchunas' (Bloomberg Analyst) Twitter Account (X)
- Position yourself for the Web3 revolution with the Web3Applications Smart Portfolio (eToro)
- DWS launches JV for first German-regulated euro stablecoin (Reuters)
- Why decentralized finance is a leapfrog technology for the 1.1 billion people who are unbanked (World Economic Forum)
- The future of banking is decentralized: What does that mean and why does it matter? (CUInsight)
The post Morpho Founder: Revolut, Robinhood & eToro to Inject Life Into DeFi (Not Wall Street Giants Like BlackRock) appeared first on The Tech Report.