Financial technology companies (Fintech) can move away from traditional loan services, because decentralized alternatives offer more accessible loans with smaller costs.
Decentralized financing loan protocols (DEFI) allow users to lend and borrow their cryptocurrency for passive income without authorization, via smart contracts instead of many financial intermediaries.
The growing efficiency and accessibility of DEFI loan protocols can encourage more fintech companies to opt for them on centralized loan alternatives, according to Merlin Egalite, co-founder of Morpho, the second largest decentralized loan protocol.
He told Cointtelegraph during an exclusive interview with ETHCC 2025:
“Fintechs have realized that the integration of DEFI is a strategic decision. If they do not do so, they will be lagging behind others because the fintechs are competing on the UX and the product they give to the users. ”
“Fintechs realize that DEFI can provide a higher rate,” said the egalite, adding that adoption DEFI can help financial institutions “provide the best financial products”, in terms of loan and negotiation.
This will inspire the share of the lion of global fintech companies to migrate to Defi over the next three years, he added.
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Morpho is the second loan protocol for the crypto industry, worth more than $ 5.5 billion in total locked value (TVL) on 20 blockchains, behind TVL emissions of $ 31 billion dollars in Aave.
DEFI loans can have a large rescue buoy for global citizens without access to traditional banking infrastructure.
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Nature without permission to Defi helps bypass traditional banking restrictions
Increasingly, Fintech companies recognize the advantages of nature without permission of DEFI, which removes financial intermediaries and the centralized risks involved in the loan and loan process.
Fintech using traditional banking rails may still lose their license or its access programming interface access (API), said Egalite, adding: adding: adding: adding: adding: adding: adding: adding:
“So, are you hung by large banks? In Defi, you are not afraid of this because there are no intermediaries. You simply trust the code itself.”
Although Fintech companies already recognize these advantages, regulated performance products can inspire even more financial institutions to explore the DEFI loans in the future, added the egalite.
Defi loans reached a new cumulative summit of $ 66.7 billion in TVL on Friday, according to Defillama Data.
TV of $ 31.7 billion in Aave Protocol currently represents 47% of the total DEFI loan value, while $ 5.5 billion in Morpho represent more than 8.2%.
This marked a significant recovery for cryptographic loans, which saw a decrease from 2022 when the centralized financing lenders (CEFI) Genesis, Celsius Network, Blockfi and Voyager have filed a bankruptcy in two years as cryptographic evaluations have dropped.
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