Peer-to-Peer 2.0

Compound Finance was the catalyst for the DeFi Summer of 2020. Its peer to peer lending marketplace and a shrewd incentive model gave birth to what we know as DeFi today.

Smart contracts replaced centralised middlemen and crypto users have been able to lend and borrow in a permissionless p2p environment. Depositor provide capital into segregated liquidity pools and borrowers draw loans from them.

As it happens with all brilliant innovations, once they mature other entrepreneurs start looking to optimise them. In the case of Compound the parameter that could be optimised is the lending mechanism itself. Presently users are borrowing from pools of capital which have its utilisation parameters and interest rate curves.

This can lead to spreads between deposit and borrow rates and therefore some inefficiency.

Enter Morpho. Its next generation lending marketplace routes lending orders across both Pools and direct peer-to-peer matching, pushing DeFi credit to the next level.

Please enjoy the podcast with Paul - the founder of Morpho!

Author is the Managing Partner at Re7 Capital - a stablecoin DeFi firm.

FOR INFORMATIONAL PURPOSES ONLY. NOT INVESTMENT ADVICE.