The decentralized lending protocol Morpho completed a $175 million funding round on June 8, co-led by Paradigm, a16z crypto, and Ribbit Capital, with full dilution valuation reaching up to $2 billion. Morpho’s total value locked (TVL) across 37 chains is nearing $6.5 billion, compared with Aave’s $12 billion.
Funding Round Confirmed Details: Investors and Valuation Structure
Co-leads: Paradigm, a16z crypto, Ribbit Capital
Confirmed participating institutions: Apollo Funds, Circle Ventures, VanEck, Ledger Cathay, Variant, Wintermute Ventures, SBI Group, French public investment bank Bpifrance
Valuation notes (confirmed by co-founder Paul Frambot to Fortune magazine): Investors purchase Morpho’s native tokens at the average monthly token price; due to different entry times for each investor, the fully diluted valuation can reach up to $2 billion, and it is not a fixed figure.
Funding history: Previously supported by Coinbase Ventures, Pantera Capital, and Nascent in earlier rounds.
Institutional Adoption and Ethereum Foundation Investment Confirmation Data
As of the confirmed data reported by Cryptopolitan on June 10, 2026:
TVL: Nearly $6.5 billion (across 37 chains); compared with Aave: $12 billion (DefiLlama data)
Confirmed institutional users: Coinbase, Kraken, Binance, Anchorage Digital, Galaxy Digital
Ethereum Foundation investment: Invested twice through the “Defipunk” policy, totaling 3,400 ETH and stablecoins worth approximately $6 million. The “Defipunk” policy requires that agreements adopt open-source licenses and non-modifiable contracts; Morpho uses a GPL 2.0 licensing framework, meeting both requirements.
Confirmation Events Facing Aave at the Same Time
Governance crisis (earlier in 2026): The Aave Chan Initiative and BGD Labs (the company responsible for building and maintaining Aave V3) withdrew in succession due to governance disputes.
KelpDAO incident (April 2026): The KelpDAO protocol suffered a $290 million attack, causing Aave to carry massive bad debts, while Morpho was only mildly affected by the same event.
Aave’s current confirmation strategy: Aave is executing a 12-month “revenue-oriented protocol strategy”; its V4 architecture attracted over $100 million in deposits and loans last month.
Frequently Asked Questions
What are the core architectural differences between Morpho and Aave?
Morpho’s modular design allows users to create independent lending markets with custom risk parameters. Co-founder Paul Frambot positions it as an infrastructure layer that enables institutions to “build their own Aave,” unlike Aave’s model of providing a unified lending pool.
How is the $2 billion valuation in this funding round calculated?
According to Paul Frambot’s explanation to Fortune magazine, investors enter the round based on the average monthly token price. Because each participant joins at different times, the specific valuation varies, and $2 billion is the upper bound of the fully diluted valuation number.
Why did the Ethereum Foundation choose to invest in Morpho?
The Ethereum Foundation makes investments through the “Defipunk” policy, which requires partner projects to adopt open-source licenses and non-modifiable contracts. Morpho’s GPL 2.0 licensing framework satisfies both requirements, making it a qualified target for investment by the Ethereum Foundation under its treasury framework.
