Paul Frambot is a rather discreet person. He's not the type to communicate. But for the past few weeks, the young co-founder of the "decentralized finance" protocol, Morpho, has not been able to hide much anymore... Meetings, trips, the man who is a graduate of Télécom Paris and defines himself as a "mathematician" is on all fronts, as Morpho has just raised 18 million dollars (17 million euros). A record for a student project previously held by a certain Mark Zuckerberg and Facebook. In 2005, the American raised $12.7 million for what was to become the world's largest social network (more than 2 billion users). A symbol that obviously did not escape Paul Frambot.

For while he may be rather discreet, the 21-year-old Frenchman has no shortage of ambition for the DeFi protocol that he has developed from January 2021 as part of his studies with CNRS researcher Vincent Danos. "Decentralized finance is something incredible, but it is not yet very efficient, and our goal is precisely to improve it," explains Paul Frambot, who brings 90 investors into Morpho (11 employees with permanent contracts) among which giants like Andreessen Horowitz (A16z), Variant as well as several Frenchmen like Arianee's boss and founder, Frederic Montagnon.

What is decentralized finance?

"Decentralized" finance is opposed to "centralized" finance, i.e. the current system where you have to go through intermediaries, your bank for example, to borrow and lend money. In DeFi, there is no intermediary, but "pools", pools in good French, which allow lenders to put money - cryptocurrencies - and borrowers to help themselves in this pool by paying an interest. The advantage of this system is that it allows any individual or business to deposit or borrow money. The only constraint is to deposit some sort of cryptocurrency deposit with the platform to ensure that one will repay their loan.

Today, there are several DeFi protocols. The best known are called Aave or Coumpound and manage respectively 6 and 3 billion dollars in their "pools". But as efficient as they are, these protocols do not offer optimal rates. It all depends on the transaction, but the lenders, the ones putting money into the pool, often have fairly low rates of return - often below 1% - when the borrowers pay relatively high rates - often above 4%. This is a problem that Morpho proposes to solve by matching borrowing and lending rates via its platform...

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