Gelato and Morpho Launch Embedded Crypto Loans for Web3 Apps: A New Era of DeFi

In a move that transforms crypto borrowing, Gelato has joined forces with Morpho to introduce Embedded Crypto-Backed Loans. This plug-and-play solution integrates directly into wallets, brokerages, and fintech platforms.

What Makes This Partnership Stand Out

The partnership will see Gelato bring its Smart Wallet SDK while Morpho brings its decentralized lending infrastructure. The outcome is a fully white-labeled, non-custodial borrowing system that allows users to access stablecoins like USDC by using their crypto assets, such as BTC, as collateral, without ever surrendering control of their funds.

The offering is designed for seamless onboarding. Loans can be accessed seamlessly via built-in wallet interfaces, allowing sign-in through email, social logins, or passkey authentication. This user experience mirrors the smoothness of modern banking apps but stays fully decentralized.

Paul Frambot, the CEO of Morpho Labs, shared his thoughts on the collaboration, stating:

“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.”

Key Features of Embedded Crypto Loans

The embedded crypto loan solution offers a range of powerful features that make borrowing seamless and secure. Users can instantly borrow USDC using BTC and other crypto assets as collateral, all through a 100% non-custodial and fully on-chain process. No credit checks or KYC hurdles make the experience smooth and accessible.

Smart Wallets powered by EIP-7702 ensure secure, streamlined interactions, while one-click wallet creation and loan execution simplify onboarding. Transactions are completely gasless and supported across more than 50 EVM-compatible chains. Developers also benefit from full brand control and a fully embedded user experience.

Thanks to this collaboration, both Web3-native and traditional platforms can easily integrate crypto lending solutions, getting up and running in days, not weeks.

A Powerful Fusion of Technology

Morpho brings to the table its recent partnership with Coinbase to enable BTC-backed loans. The platform also brings its $6.5 billion TVL and battle-tested lending protocol to the partnership. On the other hand, Gelato provides mission-critical infrastructure that powers top-tier platforms like Safe, Infinex, and Gnosis Pay.

Together, they are reshaping how applications offer financial services, bringing decentralized finance to the fingertips of millions without sacrificing control or transparency.

The solution is tailored for both institutional-grade use cases and retail adoption. End users enjoy a single-click, Web2-like flow. Meanwhile, platforms gain a compliant, programmable infrastructure that scales with their brand.

Looking Ahead: Recovery and Security Innovations

Later this year, Gelato will upgrade its offering with several powerful new features to enhance user security and control. These enhancements include multi-signer two-factor authentication, passkey-based login for added protection, and on-chain recovery options linked to email or social accounts. These improvements will be implemented directly at the smart contract level, ensuring that full decentralization is maintained. The goal is to strengthen user safety without sacrificing autonomy, staying true to the trustless, transparent principles at the heart of Web3.

Live Demo and Early Access

Morpho’s platform offers a live demo showcasing the entire borrowing process—from setting up a wallet to using BTC as collateral. Beta access is already live on Polygon, Arbitrum, Optimism, and Scroll. Katana support is on the horizon, and more chain integrations are being done.

About Morpho

Morpho is a decentralized, open-source lending platform that enables peer-to-peer and pooled crypto lending. It features customizable risk settings and uses Oracle-based pricing, and over $6.5 billion in total value is currently secured on the protocol.

About Gelato

Gelato is the go-to cloud platform for Web3 developers. From smart wallets and gas abstraction to enterprise-grade rollups, Gelato helps developers build apps that feel like Web2 while remaining fully non-custodial and on-chain.