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The $ 50 million MORPHO is an innovative DEFI borrowing agreement.
According to DEFILLAMA data, Morpho’s total lock volume (TVL) has reached US $ 1.4 billion, borrowing volume (Borrowed) has more than 880 million US dollars, and the total financing has reached 68 million US dollars.
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So, what kind of project is Morpho, which can make such a achievement in the field of DEFI, so that the chain teahouse will take you to find out.
To make clear Morpho, you must first understand the entire DEFI lending track.
Morpho has obtained such a high amount of financing enough to prove that the decentralized lending market has become an important part of the DEFI field.The proportion of decentralized borrowing funds has always been among the best. At present, TVL (total lock volume) has surpassed DEX (decentralized exchanges), becoming the largest track capacity in the field of DEFI.
As far as its business model is concerned, the decentralized lending market has achieved PMF (product market fit), that is, a sustainable business model is found in a decentralized environment.Although the early market depends on high tokens in inspiration, the market is now gradually developing to a healthier model, relying on organic demand rather than subsidy to maintain operations.
But in general, the market concentration of the lending track is high, and the head protocol occupies most of the market share.AAVE and Compound and other major participants relied on their strong brand power and long -term security records to form a clear moat.
In addition, the lending agreement needs to find a balance between liquidity and safety.Although the point of the pool model provides high liquidity, the capital efficiency is low; although the point -to -point model has high capital efficiency, the liquidity is insufficient.
Morpho provides a new solution by combining two models:
As a point -to -point (P2P) layer based on borrowing pools such as Compound and AAVE, Morpho has introduced its unique interest rate mechanism: combining P2P with P2Pool (P2Pool).The high loan interest rate and low supply rate problem caused by the low utilization rate of the loan pool have improved capital efficiency.At the same time, MORPHO also maintains the same liquidity and liquidity and liquidation guarantee as the basic protocol. Users can obtain the annual yield (APY) of the underlying pool (APY) or a better P2P APY.
In simple terms, the traditional loan pool protocol (such as Compound and AAVE) has the problem of high loan interest rates and low deposit interest rates caused by low utility pool utilization rate.Morpho provides higher deposit returns and lower loan costs through direct matching borrowers and lenders to achieve capital efficiency improvement.
For example, Xiaoming applied for 1 ETH provided by Xiaohong to Morpho. They match P2P to obtain improved interest rates.The entire process is automatically processed by Morpho, and users do not need to conduct additional transactions.
Morpho’s matching engine sorts users and matches the borrower and the loan to ensure 100% utilization, maximize economic efficiency and minimize GAS costs.
More specifically, when the supplier and borrower are matched with points, the Morpho optimizer can freely choose the P2P interest rate, but it must be selectedBoth sides are good.
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For example, when Xiao Hong became the first supplier of the Morpho optimizer, her capital would deposit into the basic liquidity pool.When Xiaoming enters as a borrower, the Morpho optimizer will automatically take Xiaohong’s funds from the pool and directly match Xiaoming, and both sides can get better interest rates.
Therefore, whether the user uses Morpho directly, or deposited the assets into the Compound, CTOKEN is stored in Morpho, which can be obtained normally.Similarly, when it matches the borrower, both will get the improved P2P APY, which is higher than the lender APY and lower than the debit APY, which is a better incentive for both parties.
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According to the matching mechanism, the Morpho optimizer uses the data structure of the priority queue to match according to the user’s hope of borrowing or borrowing.The liquidity of the new supplier first matches the largest borrower, and push it in order until the liquidity of the supply is fully matched or there is no more borrower.Similarly, the needs of new borrowers will first match the largest supplier and push in order until the needs of borrowing all meet or do not have more suppliers.
If the matching fails, Morpho will use the liquidity pool of the basic protocol as the refund mechanism to ensure that the needs of the supplier and borrower can be met.Morpho Dao selects P2P interest rates between Lending Apy and BORROWING APY in the basic protocol through the P2Pindexcursor parameter.
The Morpho optimizer protocol will automatically represent the user’s cumulative basic protocol distribution rewards, which means that users can receive rewards like the basic protocol directly.In addition, the Morpho optimizer also distributes its own Morpho reward to its users to further inspire users.
In addition, Morpho is seamlessly integrated with the existing Defi lending protocol (such as Compound and AAVE) to maintain the same fluidity and security characteristics.This essentially means that Morpho’s business is based on AAVE and Compound as a capital buffer pool to provide interest rate optimization services to deposit users by matching.Users do not need to worry about liquidity problems and can perform loan operations at any time.
Morpho Evolution: Morpho Blue
Previously, the initial version of Morpho Morpho Optimizer was running on Compound and AAVE to improve the efficiency of its interest rate model.However, the growth of Morpho Optimizer has been limited by the current underlying lending pool design. Because of its serious dependence on its DAO and trusted contractors to monitor and update hundreds of risk parameters or upgrade large -scale smart contracts daily.
After the transformation, Morpho launched Morpho Blue.
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Morpho Blue is a non -hosted borrowing agreement implemented for Ethereum virtual machine (EVM).It provides a new type of primitive that does not require trust (Primitive, a basic constructing block or infrastructure, here refers to the basic loan function or mechanism, which is the core and basic of the entire borrowing agreement).Compared with higher efficiency and flexibility.
It realizes the minimum and isolated loan market deployment by specifying a loan asset, a mortgage asset, a liquidated loan value ratio (LLTV) and a prophetic machine.The agreement does not need to be trusted, and it aims to be more efficient and flexible than any other decentralized loan platform.
Morpho Blue’s lending market is independent.Different from the multi -asset pool, the liquidation parameters of each market can be set without considering the most risky assets in the basket.Therefore, suppliers can lend loans with higher LLTV, and at the same time bear the same market risks when supplying low -to -LLTV multi -asset pools.
In addition, mortgage assets will not lend to borrowers.This reduces the liquidity requirements required for normal operation in the current loan platform, and enables Morpho Blue to provide higher capital utilization rates.In addition, Morpho Blue is completely autonomous, so it does not need to introduce the cost of paying platform maintenance, risk managers or code security experts.
It is worth noting that Morpho Blue has the asset listing function without permission.Can create a market with any mortgage and loan assets and any risk parameters.The agreement also supports the license market to achieve wider use cases, including RWA and institutional markets.
The characteristics of the risk management that do not need to be licensed also shape Morpho Blue into a simple foundation built -in block, allowing more logical layers to add more logical layers.These layers can enhance core functions by processing risk management and compliance, or simplify the user experience of passive lenders.For example, risk experts can establish a selected insurance library for non -hosting to make lenders passively earn benefits.These insurance libraries rebuilt the current multi -mortgage loan pool, but they are built on an agreement without trust.
Metamorpho is an open source (GPL) protocol for Morpho Blue, which can build any lending experience with optimized interest rates and transparent risk management above Morpho Blue.The Metamorpho insurance library accepts passive capital and stores it into the Morpho Blue market.The liquidity is restarted between various markets to manage risks and optimize returns.
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Metamorpho allows users to entrust risk management to risk experts who manage insurance libraries, as they do on AAVE or Compound, thereby simplifying the lending process.
Each MetamorPho insurance library can deposit funds with markets with different mortgage assets and different parameters to meet the needs of users with different risks.
In other words, MetamorPho supports any borrowing experience on a primitive and efficient primitive Morpho Blue, such as AAVE, Compound, Spark, Flux and all its forks.
Morpho token
Morpho token (Morpho) is the governance token of the Morpho protocol.Morpho DAO consists of holders and agents holding the Morpho token, responsible for governing the Morpho protocol.The governance system uses a weighted voting system, and the number of token to the hold of the Morpho token determines the voting weight.
The holder can vote for changes to the agreement, including the deployment and ownership of smart contracts, enable or close the cost switch of the Morpho optimizer and Morpho Blue, decentralize the front -end hosting, and control the DAO vault.
As of June 2024, Morpho distributed as follows:
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User (USERS): 4.2%
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Early Contributors (Early Contributors): 5.4%
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MORPHO LABS Reserve (Reserve for Morpho Labs): 6.0%
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Morpho Association Reserve (Morpho Association Reserve): 12.5%
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Founders (Founders): 15.2%
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Investors (Investors): 20.8%
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MorphoDAOReserve (Morpho Dao Reserve): 35.8%
As a non -liquid token, although the Morpho tokens have been issued and applied in voting decisions and project incentives, they are in an irreplaceable state.Therefore, there is no secondary market price. Users and investors receiving tokens can participate in voting governance, but they cannot sell.
Although most DEFI projects have achieved token liquidity within a few weeks, Morph Dao believes that it may take several years to achieve a long -term and sustainable ecosystem.Therefore, user allocation will be performed not only during the Morpho optimizer, but also in the future protocol.
Morpho’s tokens are determined in batches, which are determined by quarter or month, which allows the governance team to flexibly adjust the intensity and specific strategies of incentives according to the market changes.
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Although there is no market price in the initial tokens, users holding tokens can still participate in the governance decision -making of the agreement.This sense of participation and governance has inherent value itself, which can inspire users to hold and use tokens.
In addition, users holding tokens can enjoy the unique functions and privileges in the agreement.For example, token holders can obtain higher borrowing interest rates, lower fees or priority to participate in new function tests.These privileges and functions increase the actual use value of tokens, and can bring actual benefits to users even without market prices.
Future Outlook
Many people have asked questions before, will Morpho be a potential opponent of AAVE, and will it become one of the three giants of Defi borrowing?
The proposal of these issues is enough to prove the potential of Morpho.
The launch of Morpho Blue may pose a threat to AAVE: Although AAVE has a strong market share and user base, Morpho may attract more users to its platform through its flexible and efficient solutions.On the other hand, AAVE is also capable of building an interest rate optimization function similar to Morpho to meet the needs of user and maintain its market position.
Moreover, Morpho has shown a strong business growth momentum in the lending market, especially after its launch of Morpho Blue.
Morpho Blue allows anyone to create a loan market based on the agreement to create a borrowing market based on the agreement, and choose mortgage, lending assets, prophetic machines, borrowing ratio (LTV) and liquidation ratio (LLTV).This flexibility and efficiency provides users with richer market choices, which is in line with the free market principles of decentralized finance (DEFI).
In addition, Morpho has accumulated $ 1.4 billion in capital management. Although it cannot be counted as a level of $ 7 billion in AAVE, these funds are currently concentrated in the interest rate optimizer function, but there are many ways to introduce them into new functions.
The Morpho token budget is sufficient and flexible, which can attract users through subsidies in the early stage.Morpho’s stable operation history and amount of funds have accumulated a certain accumulation in security and brand, increasing user trust.
All in all, Morpho, as an innovative DEFI borrowing agreement, has sufficient market potential and technical advantages.However, to stand out in the fierce DEFI market, Morpho needs to continue to innovate, while paying attention to user experience and market education, ensuring security and stability, and establishing an effective governance mechanism.Only Morpho can occupy a place in the future DEFI ecosystem?Let’s wait and see.
Reference link:
https://mint-openTures.Medium.com/will-rapidly-morpho-BECOME-A-FORMIDABL
https://docs.morpho.org/morpho-blue/tutorials/track-raates/
https://en.thebigwhale.io/article-en/morpho-the-killer-app-decentralised-finance
