Morpho’s Mission: Making Financial Infrastructure A Public Good.

This article articulates Morpho's mission, serving as a guiding principle for its decentralizing DAO. It ensures contributions to Morpho remain focused on its overarching goals, rather than chasing fleeting trends.

Why financial infrastructure should be a public good

Financial infrastructures form the backbone of any economy. They are foundational systems where participants in multi-sided markets come together to settle financial operations. Yet, every layer of the financial infrastructure stack lacks openness, efficiency and resiliency.

Openness

• Transparency: Both consumers and builders lack visibility to understand mechanics, risks and costs.
• Accessibility: Many populations can be excluded from traditional financial services for reasons ranging from lack of official documentation to geographic isolation.
• Competitiveness: The high barriers to entry for building financial infrastructure limit healthy competition, ultimately resulting in higher costs for consumers.

Efficiency

• Fragmentation: The lack of standardized interoperability results in fragmented opportunities and diminished quality of services for both builders and users.
• Speed: Transactions can be slow due to manual processes, compliance requirements, or outdated proprietary systems.

Resiliency

• Centralization: Traditional finance heavily relies on highly centralized institutions. This leads to systemic risks and a concentration of power that can spread to broader financial systems during major crises.
• Custody: Traditional services control clients' assets directly, exposing customers to hacking, fraud, and mismanagement risks that can lead to asset loss, restricted access.

Most infrastructures are owned by private companies that usually lack the right incentives to solve the problems mentioned above. Instead, financial infrastructure should be neither privately nor state-owned, but rather globally owned—a public good for all humanity, much like the internet.

A public good is a resource accessible to all without diminishing its availability. While traditionally provided by governments through taxes (e.g., roads, parks), this concept also extends to open-source software like Linux, which can be freely used and distributed.

For financial infrastructures, this would mean that every individual could access resilient financial services. All code, rules, and conditions would be transparent, with users' only trust assumption being the verifiable technology itself.

As global participation grows in these financial public goods, network effects would enhance their efficiency, creating unprecedented value that benefits end users—not middlemen.

How Morpho can achieve this mission: Build finance like the Internet

The best way to transform private financial infrastructure into a public good is rebuilding it in the style of the early Internet, enabled by blockchain technology. The design decisions of the early internet–namely, decentralized, permissionless and primitive protocols–led to an explosion in development, efficiency, creativity, and value creation.

Before Ethereum, applying these principles to financial operations was challenging, because storing and modifying financial data online required a trusted third party hosting a server. Now, blockchain technology enables server-side software to take precedence over the server and its owner, finally allowing financial infrastructures to be publicly owned.

Finance could undergo a true renaissance if operations were aggregated and settled on global protocols that are as decentralized, permissionless, and primitive as possible.

Decentralized

Infrastructures should not be owned by any central authority.

• Resiliency: The financial networks that support the world should be provably secure. Their accessibility and functionality should not hinge on a single server, community, individual, or any other single point of failure.
• Predictability: Decentralized networks form a trustless foundation that builders can integrate with confidence, knowing that it will work the same way forever. Even as applications or UIs change, the foundation remains unchanged, thus reliable.

Permissionless

Financial infrastructures ought to be open for anyone to build on.

• Flexibility: With base layer offering high degrees of freedom, builders can serve any type of user, adapting to their unique requirements, origin, situation, or regulatory constraints.
• Competition: Permissionless financial networks allow any number of builders to compete to provide the most efficient solution to different financial needs. Over time, open access drives fees down and quality up, as developers compete to offer better, cheaper, and more innovative solutions.

Primitive

Core infrastructures of financial networks should be kept as simple as possible, with complexity pushed to the edges.

• Innovation: A simple technical foundation fosters creativity by offering developers greater flexibility and fewer restrictions. Specific clients can focus on features like compliance, risk management, and user experience without worrying about the core protocol. This division of responsibilities enhances both performance and resilience, allowing the core protocol to concentrate solely on executing basic financial operations securely and efficiently.
• Aggregation: A primitive protocol can accommodate numerous products using the same core technology, allowing the same instances to be reused across diverse use cases. The more primitive a protocol is, the more adept it becomes at connecting various financial applications. As the number of financial applications built on the network grows, network effects intensify at the primitive level, generating additional value for all participants.

What has Morpho done to achieve this mission

The idea of rebuilding financial infrastructure as public goods is ambitious, and could take decades to accomplish. However, one must start small and bootstrap before progressively growing from a crypto product into core financial infrastructure.

Morpho began by focusing on a specific challenge: optimizing existing crypto lending services. But it was quickly evident that the systemic improvements would require completely rebuilding lending markets from the ground up, not as a specific product or service but as financial infrastructure that anyone could use to build their own products and services.

Morpho’s unique, aggregated architecture is designed to provide:

• Open, immutable, and flexible lending infrastructure that any kind of builder (entrepreneurs, fintechs, CEXs, institutions) can use for an endless number of different use cases.
• Shared liquidity that increases Morpho’s efficiency and network effects, ensuring that every participant can benefit as the ecosystem grows.
• Better access to diverse yet tailored lending/borrowing experiences for users all over the world.

What will come next

Improve decentralization. Ensure Morpho has an active, engaged, and growing community of owners. Advancing Morpho’s decentralization will always be a critical, ongoing goal because it is one of the most important attributes of a blockchain-based public good.

Improve the current Morpho Stack. Recruit more contributors to streamline the product suite and ensure developers have all the tools they need to create successful businesses on top of the Morpho platform.

Grow the Morpho Ecosystem. Morpho is still in its early stages, and many potential builders and users remain unaware of its capabilities. Many more crypto borrowers and lenders are yet to be connected on the Morpho platform.

Looking ahead. While Morpho has pioneered numerous innovations in the DeFi space, continuous improvements is crucial to maintain its industry-leading position. Morpho's contributors are dedicated to researching and developing its future, pushing the boundaries of what's considered possible in finance.

If Morpho’s mission resonates, consider joining us at jobs.morpho.org!