According to Merline Egalite, co-founder of Morpho, fintech firms are expected to transition to decentralized finance (DeFi) lending within three years due to its permissionless nature and lower fees compared to traditional lending services. DeFi allows users to lend and borrow cryptocurrency directly through smart contracts, eliminating the need for financial intermediaries. This shift is driven by the competitive advantages DeFi can provide, such as higher rates and accessible financial products. Egalite noted that fintech firms are realizing the strategic importance of integrating DeFi to avoid falling behind in terms of user experience and product offerings. The total value locked in DeFi lending has surged to an all-time high of $66.7 billion, with Morpho holding over $5.5 billion. As more fintech firms recognize the benefits of DeFi, its adoption is poised to rise significantly in the coming years.

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