Robinhood has picked DeFi lending protocol Morpho as the infrastructure behind its new Robinhood Earn product. The company says it has 27.7 million funded customers, and eligible US users will be able to hold USDG, Robinhood’s dollar-pegged stablecoin, inside the app and earn roughly 7% APY.
How the yield flow is structured on-chain
On the user side, the setup is simple: hold USDG in the Robinhood app. The funds are then automatically deposited into a Morpho Vault. From there, the vault lends capital to institutional borrowers, with the source material noting exposure to firms using protocols such as Spark, Ethena, and Maple as collateral. The interest paid by those borrowers becomes the yield distributed to users.
The full process settles on Robinhood Chain, the company’s new Ethereum Layer 2 built on Arbitrum. Vault curation is handled by Steakhouse Financial, which selects the lending markets the funds enter and manages the balance between risk and return.
Why Robinhood used an open DeFi network
Robinhood Crypto did not build a closed lending system for this product. It chose an open decentralized network instead. Morpho co-founder Paul Frambot said DeFi technology works best as infrastructure, allowing brands to build products that are more open, transparent, and competitive than those running on traditional financial rails.
Gaëtan Thabot, Director of Partnerships at Robinhood Crypto, said the integration gives eligible users a simpler way to put digital assets to work through Morpho’s open credit network. Morpho was already being used by major institutions and platforms before this launch. The source names Coinbase, Bitwise Asset Management, Société Générale, and MetaMask among those that have built on the protocol for on-chain credit products.
Morpho adds Robinhood to a growing institutional base
Morpho already manages more than $11 billion in deposits globally, according to the source material. The Robinhood integration could lift that figure. The announcement also comes after Morpho closed a $175 million funding round co-led by Paradigm, a16z crypto, and Ribbit, with participation from Apollo Funds, Circle Ventures, and VanEck. Total capital raised now stands at more than $250 million.
That financing had a clear stated goal: speed up partnerships with leading brands. Robinhood’s use of Morpho is the latest example of that plan in action. It also reflects a different distribution model for DeFi lending. Instead of asking users to visit a protocol directly, Morpho is being embedded inside consumer finance apps that already have large retail audiences.
What the market will watch after launch
The rollout of Robinhood Earn begins over the coming weeks for eligible US customers. One key data point will be adoption figures disclosed in Robinhood’s next earnings call. If the product offering roughly 7% APY gains traction, it may serve as a model for other fintech apps seeking to add DeFi-based yield inside familiar interfaces. The source also points to Morpho’s token price and TVL as on-chain signals to monitor.