Paul Frambot, CEO and founder of lending protocol Morpho, believes the future growth of Decentralized Finance (DeFi) is largely dependent on fintech pioneers such as Revolut and Robinhood HOOD.
What Happened: In an interview with DL News, Frambot said that the next phase of financial infrastructure development will be driven by the most tech-savvy players in the finance sector. He referred to DeFi as an "artificial casino" where speculation is the primary driver of yields,
Morpho, backed by venture capital firms such as a16z and Ribbit Capital, launched Optimiser in 2021. This software layer is designed to maximize yields. However, since its launch, DeFi's total TVL (invested deposits) has seen a 56% drop, leading to fierce competition for resources among developers and builders.
Frambot believes that leading fintechs like Revolut, Robinhood and eToro, all of which have integrated crypto into their offerings, could be the saving grace for DeFi. He is hopeful that these and other fintechs can boost DeFi’s appeal to mainstream users.
He also pointed out the potential for DeFi in payment processing, where fintechs currently rely on the same outdated “rails” as traditional financial players. Frambot anticipates more fintechs will seek DeFi partnerships in the near future.
Why It Matters: Robinhood, in particular, has been making significant strides in the crypto market. The company’s crypto strategy is successful in attracting millennials, leading to a 161% spike in crypto-based transaction revenue.
Robinhood’s efforts in expanding its crypto team, broadening its crypto trading services to the European Union, and acquiring Bitstamp for $200 million could potentially increase its operating income to approximately $900 million in 2024, as per Bernstein analysts.
Furthermore, Robinhood has recently integrated Solana into its Web3 wallet, marking another milestone in the company’s ongoing efforts to expand its digital asset offerings.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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