Morpho and Gelato launch simple loans using crypto as collateral
Users across several blockchains can now take non-custodial, crypto-backed loans in just days, the two firms claim.
DeFi is racing to close the usability gap with traditional platforms. On Wednesday, June 25, Web3 cloud firm Gelato and Defi lending protocol Morpho announced the launch of embedded crypto-backed loans. According to the two firms, the platform would be as easy to use as a banking app.
Paul Frambot, CEO of Morpho Labs, said that the partnership will make DeFi self-custodial crypto loans more accessible than before. He explained that users can borrow the USDC stablecoin by using crypto assets, including Bitcoin, as collateral.
“We’re excited to see more platforms bring crypto-backed loans to users in a self-custodial way. Morpho is built to be integrated, and Gelato makes it easy to deliver a seamless UX on top,” Paul Frambot, Mopho Labs CEO.
Crypto loans won’t require credit checks
According to Morpho and Gelato, these loans are meant for both retail and institutional users. The platform will include features such as one-click borrowing with collateral, as well as wallet creation with social logins. At the same time, borrowing will not require credit checks.
Morpho’s non-custodial loans are available on Polygon, Arbitrum, Optimism, and Scroll, and will soon be available on the Katana blockchain. The two teams also stated that they would add support for more blockchains in the future.
Crypto-collateralized loans are an attractive way for holders to leverage their digital assets. They enable users to get liquidity from their crypto without having to sell. Moreover, some traders use crypto loans as leverage instruments to seek more upside in trading.
Still, there are risks involved in crypto lending, both for users and platforms. For instance, a sharp drop in crypto prices could render a platform’s collateral insufficient to back outstanding loans, potentially leading to a collapse.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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