Paul Frambot, CEO and founder of the lending protocol Morpho, believes the future growth of Decentralized Finance (DeFi) hinges on fintech pioneers like Revolut and Robinhood. In a recent interview with DL News, Frambot outlined his vision for the next phase of financial infrastructure development, stating that it will be driven by the most tech-savvy players in the finance sector.
He described the current state of DeFi as an “artificial casino,” where speculation is the primary driver of yields. Morpho, backed by venture capital firms like a16z and Ribbit Capital, launched its Optimiser software in 2021 to maximize yields. However, since its launch, DeFi’s total TVL (invested deposits) has dropped by 56%, 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 companies, along with others, can broaden DeFi’s appeal to mainstream users. He also pointed out the potential for DeFi to revolutionize payment processing, where fintechs currently rely on outdated systems similar to those used by traditional financial players. Frambot anticipates more fintechs will seek DeFi partnerships in the near future.
Robinhood, in particular, has been making significant strides in the crypto market. Their crypto strategy has been successful in attracting millennials, leading to a 161% spike in crypto-based transaction revenue. Robinhood’s ongoing efforts to expand its crypto team, broaden its crypto trading services to the European Union, and acquire Bitstamp for $200 million could potentially increase its operating income to approximately $900 million in 2024, according to Bernstein analysts. Furthermore, Robinhood has recently integrated Solana into its Web3 wallet, marking another milestone in its ongoing efforts to expand its digital asset offerings.
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.
