What he forgot to mention is that Morpho can charge fees at the market level, allowing it to capture the economic value created by curators without bearing the cost of risk management. This means markets are neither neutral nor ownerless. Curators invest in building liquidity and managing risk, but Morpho retains the ability to extract a share of the revenue, compressing curator margins and accelerating competition toward zero profitability. This creates a fundamental misalignment: either Morpho monetizes and competes for the economics generated by curators, or it doesn't and must sustain its business through other revenue sources once incentives run out. Curators should own their market economics and capture fees from both lending and borrowing. Otherwise, they're building businesses on infrastructure that can tax away their margins. Full stop. This is why Paul is spooked about Aave V4.

One of the safest places to lend USDC on Aave is Aave V4 Base in my opinion. There you can get 5.79% APY for lending USDC only against tokenized stocks, which are all issued by Coinbase. I think lender losses are much less likely here than in most other markets.

After our SEC Reg Crypto Assets letter, we've responded to @TheFCA on tokenised gold. Same message both sides of the Atlantic: tokenisation is about collateral mobility, not just trading. £52m of tokenised gold works as collateral on @aave. Regulatory certainty will scale it.

Sentora-curated markets went live on @aave v4 yesterday. Our risk engine monitors capital flows between Hubs and Spokes, utilization and governance updates to flag risk early. Many of these indicators are now public on Sentora Risk Radar. Read more:

The real promise of tokenized securities is not just onchain trading, but putting them to work: as collateral, supplied and borrowed. In our Reg Crypto Assets comment letter, we asked the @SECGov to clarify that they can be used on non-custodial lending protocols.

I’ve been going on about how Aave V4 completely changes the economics of the curator business for a while now, so if you’re running a curator business and aren’t seriously considering building your own credit franchise on V4, I genuinely don’t know what to tell you. The business opportunity here is absolutely wild, curators have spent years building relationships with capital allocators and developing their distribution, V4 gives them the opportunity to turn all of that into an actual credit franchise where they can earn fees for managing capital AND capture a share of the economics of the lending markets they operate. Which means curators can now originate borrowing demand, structure the markets that serve that demand and benefit from additional economics as that credit activity scales, which is a much more defensible and lucrative business than endlessly competing for deposits and squeezing out a few extra bps in vault/performance fees. I’ve said this before but I genuinely think some of the largest credit businesses in DeFi will end up being built on V4. Sentora recognised this early and I think a lot of curators are going to look back and wonder why they didn’t. The opportunity is staring them in the face.

@aave Horizon (RWA market) has ~$55m @Bitwise USCC currently being used as collateral to borrow stablecoins. Last 30d yield in USCC is ~6% vs ~3.5% borrow rate. plenty room up to the cap for any savvy borrowers/loopers to take advantage of.

A delta-neutral strategy on Coinbase stocks, using @aave V4 on @base and Hyperliquid. Deposit the stock on Aave, borrow USDC against it, and short the same stock on Hyperliquid. At today’s rates, it works out to up to 11% a year, with no exposure to the stock price ↓