Pharos Network Collaborates with Morpho, Introducing Homegrown Reservoir-Based Lending System Infrastructure
In a significant move towards bridging traditional finance and decentralized finance, Pharos Network, a Layer 1 blockchain focused on real-world asset finance (RWAfi), has partnered with Morpho, a reputable lending network with over $9 billion in deposits. This collaboration aims to merge institutional trust with DeFi flexibility, accelerating the adoption of tokenized real-world assets in blockchain finance.
The integration of Morpho's lending infrastructure directly into Pharos' mainnet lays the foundation for a more transparent and capital-efficient on-chain credit ecosystem. This partnership positions Morpho as the official lending infrastructure provider for Pharos, supporting a broader RWAfi strategy alongside other players like Ant Digital and Gauntlet.
The collaboration brings capital-efficient, risk-isolated lending pools to the Pharos Network. These pools, designed for both institutional and DeFi participants, will feature isolated risk vaults for different asset types, such as tokenized mortgages and trade receivables, preventing risk spillovers between pools. Native support for complex, institution-grade lending strategies will also be included, maintaining DeFi’s openness and modularity.
Kirk Hutchison, New Chains Growth at Morpho, stated that the partnership is creating a powerful infrastructure for structured lending products, better risk pricing, and more accessible yield opportunities across both institutional and retail markets. Wish Wu, CTO and Co-Founder at Pharos, echoed this sentiment, stating that the merger is about building trust and composability at the core of RWAfi.
The first framework of the Pharos vault and capital deployment will focus on the design of vaults for institutions, backed by Pharos' authority across custody, credit modeling, and liquidity routing. This framework is expected to facilitate efficient lending with isolated risks, thereby opening the door to flexible credit markets for asset creators like loan platforms and liquidity providers.
Reports project that the real-world asset sector will grow to $600 billion by the end of the decade. This partnership is a key development towards bridging traditional finance and decentralized finance by establishing institutional-grade lending rails within the growing on-chain real-world asset ecosystem.
The explosive growth of the real-world asset market has been previously covered, with the market soaring almost 60 times over the last few years. The partnership between Pharos Network and Morpho is part of the broader RWAfi strategy, aligning with peers like Ant Digital, R25, and Gauntlet. The collaboration will bring Morpho's lending infrastructure to the Pharos mainnet, marking an inaugural step towards institutional-grade lending rails in the RWA ecosystem.
Data from rwa.xyz shows that institutions have an uncontested lead in the inflow of funds across the sector at press time. The partnership strengthens the broader RWAfi strategy, aiming to merge institutional trust with DeFi flexibility, accelerating the adoption of tokenized real-world assets in blockchain finance and creating scalable, secure credit markets accessible to both institutional investors and retail participants.
- Leveraging Morpho's lending infrastructure, Pharos Network seeks to develop scalable and secure credit markets for tokenized real-world assets, thereby bridging the gap between traditional finance and DeFi.
- The collaboration between Pharos Network and Morpho aims to create a more capital-efficient and transparent on-chain credit ecosystem, which includes isolated risk vaults for different asset types like mortgages and trade receivables.
- The integration of Morpho into Pharos' mainnet not only expands the Pharos Network's lending infrastructure but also aligns with peers like Ant Digital, R25, and Gauntlet in the rapidly growing real-world asset sector, projected to reach $600 billion by the end of the decade.
