RWA blockchain Pharos Network has revealed that it’s working with lending network Morpho to roll out native lending backed by tokenized real-world assets. The collaboration will see new lending capabilities take root on Pharos, adding greater utility to RWAs and giving them DeFi-like powers, strengthening the incentives for holding these tokenized assets.
Morpho knows a thing or two about lending, having accrued more than $9B in user deposits, but its move onto Pharos’ Layer 1 will mark fresh territory for deploying its best-in-class infra. The idea behind the initiative is to enable asset originators and LPs on Pharos to enjoy greater capital efficiency through being able to access lending markets on demand. Morpho will take care of the infra, with the Pharos ecosystem onboarding the sort of professionals who stand to benefit from this arrangement.
RWAs Come of Age
Now a $25B sector, tokenized real-world assets may have taken their time in gaining traction, but they’re making up for it now, having been posting an average of 5% monthly growth all through 2025. Pharos has been doing its bit to expedite this process, its EVM-compatible chain providing the scalability and compliant framework institutions need to access the thriving RWA onchain economy. But while tokenizing assets such as equities and bonds is the starting point, it’s certainly not the endgame. The next step is to add greater utility to these assets over and above the ability to trade them 24/7, which is where Morpho comes into the picture.
“Deploying natively on Pharos allows us to keep extending Morpho’s most trusted lending infrastructure to the real-world asset space following initial success like private credit and tokenized stocks,” explains Morpho’s Kirk Hutchison, adding: “Pharos’ vision for RWAfi aligns with our commitment to transparent and scalable credit systems. Together, we are creating a powerful infrastructure for structured lending products, better risk pricing, and more accessible yield opportunities across both institutional and retail markets.”
The phrase “RWAfi” is significant here. It’s an attempt to combine the best bits of DeFi – global access; composability; money markets – with the compliance and professionalism that characterizes TradFi. Once assets have been tokenized and made tradable onchain, there’s a lot more that can be done with them than simply swapping them. Lending is the most obvious DeFi-native use case to give the RWA treatment, allowing institutions and pro investors to use their assets as collateral and borrow against them or lend them to counterparties.
DeFi Dressed Up
There’s an array of DeFi protocols out there offering yield and novel financial primitives galore, but the majority are unsuited to institutions, who are required to tread carefully when transacting onchain. While recent legislation such as the GENIUS Act has made it safer for Wall Street firms to enter the onchain economy, they are obliged to do things by the book – which is why solutions such as that being developed by Morpho and Pharos hold so much promise.
Pharos is preparing to deploy a number of institutional-focused vault launches and capital deployment frameworks, and this is where Morpho will be involved initially by helping refine the vault designs. The integration of Morpho’s lending infrastructure expertise will support composability with Pharos’ existing infrastructure. In the process, it will showcase the sort of financial primitives that RWAs can support, allowing LPs and asset issuers to generate yield and efficiently put their capital to work.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
