Collaboration between Pharos Network and Morpho: Creating Indigenous Lending Framework for RWA Assets
In a significant move for the world of decentralized finance (DeFi), Morpho and Pharos Network have announced a strategic collaboration to build institutional-grade lending rails within the on-chain real-world asset (RWA) ecosystem.
The alliance will see Morpho's capital-efficient lending infrastructure natively integrated into Pharos' high-performance public Layer 1 blockchain, focusing on real-world asset finance (RWAfi). This partnership brings Morpho's established lending framework, managing over $9 billion in deposits, directly onto the Pharos mainnet.
Benefits of the Collaboration
The integration will have several key impacts on real-world asset lending:
- Risk Isolation: Morpho’s lending engine deploys separate vaults for each asset class, ensuring that risks remain isolated within those vaults, thereby reducing contagion risk across different asset pools.
- Capital Efficiency: Embedding Morpho’s lending framework enables more efficient use of capital by matching borrowers and lenders with precise risk profiles and credit terms adapted to real-world collateral.
- Institutional-grade Tools: The collaboration supplies transparent tools for lending, credit risk modeling, liquidity routing, and custody designed for complex, institution-level lending strategies, thus advancing the integration of traditional finance concepts with blockchain-based asset markets.
- Scalable On-Chain Credit Systems: By natively hosting this infrastructure, Pharos can support scalable, structured lending products for tokenized mortgages, invoice financing, and other RWA classes, potentially expanding toward retail users after launching institutional vaults.
Enhancing the RWAfi Ecosystem
Morpho becomes Pharos’s official lending infrastructure provider, supporting the broader RWAfi strategy alongside partners like Ant Digital, R25, and Gauntlet. This collaboration promotes mainstream adoption of tokenized real-world assets with hybrid finance capabilities.
Wish Wu, CTO and cofounder at Pharos, welcomed Morpho's addition to the projects building on his blockchain. Pharos' vision for RWAfi aligns with Morpho's commitment to transparent and scalable credit systems.
The first deployments will focus on institutional vault designs, enhanced by Pharos' presence across credit modeling, liquidity routing, and custody. As these vaults are launched and capital deployment frameworks are powered by Morpho's protocol, the integration of Morpho's lending infrastructure into Pharos' mainnet lays the foundation for a more transparent and capital-efficient on-chain credit ecosystem.
This strategic collaboration will revolutionize lending on-chain for real-world assets by providing a transparent, capital-efficient, and risk-mitigated infrastructure that bridges traditional finance and DeFi, supporting both institutional and retail participation in tokenized asset lending markets.
- The collaboration between Morpho and Pharos Network aims to construct institutional-grade lending rails on the blockchain, focusing on decentralized finance (DeFi) and real-world asset finance (RWAfi).
- The integration of Morpho's lending engine into Pharos' blockchain promises risk isolation, capital efficiency, and the provision of institutional-grade tools for lending, credit risk modeling, liquidity routing, and custody.
- The partnership between Morpho and Pharos will contribute to the development of scalable, on-chain credit systems for tokenized mortgages, invoice financing, and other real-world asset classes, potentially catering to retail users in the future.
- The alliance brings Morpho, with its established lending framework managing over $9 billion in deposits, onto the Pharos mainnet, enhancing the RWAfi ecosystem alongside partners like Ant Digital, R25, and Gauntlet.
- This strategic partnership is expected to revolutionize lending on-chain for real-world assets, bridging the gap between traditional finance and DeFi, and promoting mainstream adoption of tokenized real-world assets. This will be achieved by providing a transparent, capital-efficient, and risk-mitigated infrastructure for both institutional and retail participation in tokenized asset lending markets.
