Key takeaways
Blend connects neobanks to yield venues including Morpho, Aave and Euler and handles compliance, screening, audit logging and KYC mapping for them.
Jamie Morris says Blend is credibly neutral: it does not aggregate yield or decide where funds go, and it deprecated looping strategies because of liquidation risk.
Morris argues compliance is becoming a defensible moat as traditional finance and DeFi converge, with people and partnerships mattering more than technology.
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Summary
Blend's co-founders say the startup handles screening, KYC mapping and account segregation for neobanks but leaves the choice of yield venue to them, and that compliance will become the moat.
Blend, founded by Manny Narang and Jamie Morris after they built bridge infrastructure at Across and Ooma Labs that routed billions in cross-chain user flows, wants to be the layer that lets any neobank offer DeFi yield. The platform connects neobanks to permissioned and permissionless venues including Morpho, Aave and Euler while it handles compliance, screening, audit logging and KYC mapping on their behalf.
Why neobanks want yield
Narang says more neobanks are deciding to take the risk because their users treat them like a bank and expect yield. "You don't wanna go to a bank and not get yield," he says.
“If there's one word that can sum up blend, boring. Our goal is to be boring. Okay? Like, I we I that's one simple where we our goal is to be boring, and crypto has enough excitement that we don't wanna add.”
Jamie MorrisHow the plumbing works
Jamie Morris says every account on Blend is managed on its own and money is never pooled at the account level. When a neobank runs KYC, its mappings flow through Blend and issuers can accept them through token sharing. Blend also runs OFAC and open sanction screening in its API so it can notify the app right away if something goes wrong.
Morris says the team's work on Across means it knows when to use CCTP, CCIP or LayerZero and how to make transfers gasless. Blend uses Filadex protocol ratings so neobanks can make informed allocation decisions, and Morris says the team is "very much in the weeds" on Morpho Midnight's V2 stack for fixed-rate lending.
Neutral by design
According to Jamie Morris, Blend does not aggregate yield or determine where funds go: the neobank picks the venue. A few months back the company deprecated looping, which Morris says creates a mesh of synthetic leverage that could become unstable. "Our goal is to be boring," he says.
Compliance and partners as moat
Jamie Morris expects the compliance moat to get thicker as TradFi and DeFi converge. Blend is building a neobank kit with Monad and wants to be a one stop shop, modeled on Plaid and Column in Web2. He says technology is no longer a moat and points to partners such as Agora and Monad.
Morris cites Brookwell, which offers FDIC insured accounts and is powered by Blend, as an example. He says its single experience across stablecoin and fiat will be the industry golden standard in the next three months.
Taken together, the founders describe Blend as compliance infrastructure, not a yield product. It handles screening, KYC flow-through and segregated accounts, it leaves allocation to the neobank, and it is betting that regulated, credible counterparties will matter more as traditional finance and DeFi come together.
Blend, Morpho, Across, and Monad come up most.
- People
- Jamie Morris
- Manny Narang
- Ravi
- Dick
- Drew Rogers
- Eric
- Hart
- Keoni
- Ryan
- Companies
- Blend
- Morpho
- Across
- Monad
- Brookwell
- Portal
- Aave
- Ooma Labs
- Euler
- Airborne
- Steakhouse
- CAS
- Cribby
- Dakota
- Flex
- Turnkey
- Vici
- Wirex
- Agora Finance
- Filadex
- LayerZero
- Plaid
- Chainlink Labs
- Circle
- Curve
- Dfns
- Franklin Templeton
- Koshmoney
- LayerZero Labs
- VanEck Ventures
