Crypto.com has announced an ambitious plan to introduce DeFi-backed loans for its customers, marking a significant foray into the decentralized finance landscape. This initiative will be facilitated by Morpho, the second-largest decentralized finance lending protocol, and follows a similar partnership established by Coinbase earlier this year.
In a strategic move to bolster customer offerings, Crypto.com will leverage Morpho’s capabilities to enable users to borrow against their cryptocurrency deposits without the need to liquidate their assets. As part of this collaboration, Morpho will deploy its lending protocol on Cronos, the blockchain developed by Crypto.com.
Ketat Sarakune, who heads yield and asset growth at Crypto.com, emphasized the importance of the collaboration in pushing forward the company’s mission to accelerate the global transition towards cryptocurrency. He stated, “This collaboration with Morpho and Cronos is a powerful step in that direction.”
The integration is poised to empower Crypto.com users, allowing them to utilize their crypto holdings more effectively. Moreover, this partnership will help Morpho expand its customer base by tapping into the extensive trading community associated with Crypto.com. The exchange is currently ranked as the sixth-largest globally, reporting an impressive $86 billion in trading volume last month, according to newhedge, a crypto data analysis platform.
The integration of Morpho’s services is expected to go live before the end of the year, positioning Crypto.com as the second cryptocurrency exchange to offer DeFi-backed loans through the protocol, following Coinbase’s success. The earlier partnership between Morpho and Coinbase has demonstrated a robust performance, with the total loans originating from Coinbase surpassing $1 billion earlier this week.
As the crypto lending sector continues to establish itself as a leading use case for decentralized finance, recent data from DefiLlama indicates that deposits into DeFi lending protocols reached an all-time high of $138 billion in September. Morpho has particularly benefited from this trend, boosting its deposits by 121% this year to a total of $11.5 billion.
In a noteworthy development, Société Générale, one of Europe’s largest banks, recently announced its plans to integrate stablecoins with Morpho, thereby allowing its institutional clients to participate in DeFi lending. A representative from Morpho indicated that discussions are ongoing with additional fintech firms, exchanges, institutions, and asset managers to facilitate the development of new financial applications utilizing their protocol.
This ongoing integration exemplifies the “DeFi mullet” strategy, which many protocols are adopting to penetrate new markets and attract greater deposits. This strategy encapsulates the idea of simplifying the user experience for consumers by abstracting the complexities inherent in direct DeFi interactions, allowing centralized crypto exchanges like Crypto.com to serve as a user-friendly façade over the intricate DeFi mechanics.
Together, Morpho and Cronos plan to introduce new stablecoin lending markets that will be supported by Crypto.com’s wrapped versions of Bitcoin and Ethereum, and are also exploring the potential of using wrapped real-world assets as collateral. This new offering is set to enhance Crypto.com’s existing DeFi features, such as its integration with Aave, enabling customers to lend their Ethereum deposits for yield.
