Bankless · Wednesday, July 29, 2026
The evolution of DeFi protocols like Uniswap and Morpho reflects a shift from catering to retail users with passive experiences to providing more control for sophisticated institutional players. Early DeFi prioritized simplicity due to high gas fees and less experienced users, whereas newer iterations like Morpho Midnight offer more traditional financial controls.
“In the early days of DeFi, basically you had multiple constraints. Gas was high. And also the set of users that was interacting with the chains was basically users with their Metamask wallet that had a little bit of money. And they were in no way financial experts, right? So basically the protocols initially had to internalize a lot of the complexity in order to provide a passive experience to users.”
“But as the ecosystem grows and the complexity of the players, they're more and more complex and understand they want more control. And so as a DeFi protocol, you have an interest in modularizing some parts of your code and of the responsibilities that you have and leave it to the market because the market will price it better and it will scale much more because they'll be able to discover much more use cases.”
“And lending followed the same thing, which is it started with the very passive thing that managed both the risk and the rate for you. And then Morpho Blue, we came in, like Morpho Blue is harder to use than it is to use Aave, right? Because you have to choose beyond like this, like, you know, 2000 markets, 1000 volts, like, you know. It's hard. And so you rely on those curators to basically simplify the experience. So you have one extra layer. And Midnight goes one step further in that direction and says, hey, you know what? The protocol should not manage the risk, but it should also not manage the rate. And the ecosystem participants should do it.”