Morpho (MORPHO) Project Analysis
Research Institute Review
The highlights of the Morpho project lie in its strong alignment with market demands, rapid business growth, sufficient token budget, and inheritance of the security and brand credibility of leading lending protocols Aave and Compound. The protocol has a stable operational history and faces little competition from similar products based on existing lending protocols. Currently, Morpho's Total Value Locked (TVL) stands at $1.866 billion.
Recent Breakout Points
Since the launch of Morpho Blue on Ethereum mainnet earlier this year, the protocol has attracted $1.35 billion in total deposits and $510 million in total borrowings. Since its launch on Base in mid-June, Morpho Blue has quickly gained traction, adding $110 million in deposits and $36.84 million in borrowings. Meanwhile, Morpho Optimizer also shows strong performance, with total deposits reaching $910 million.
Project Introduction
Morpho is a decentralized lending protocol on Ethereum. Its value proposition is simple: offering better rates for both lenders and borrowers—higher deposit yields and lower borrowing rates. It achieves this by acting as an intermediary for P2P liquidity matching, improving capital efficiency and optimizing rates for both parties. When P2P matches are unavailable, the protocol utilizes liquidity from underlying lending pools.
Token Utility
MORPHO is the governance token of the Morpho protocol. The protocol is managed by the Morpho DAO, consisting of MORPHO holders and delegates, through a weighted voting system where voting power is proportional to the amount of MORPHO tokens held. MORPHO holders can vote on:
Future initiatives to develop the protocol
Deployment and ownership of Morpho smart contracts
Activation/deactivation of fee switches within the protocol
Management of DAO treasury funds
Tokenomics
| Category | Allocation | Locking/Unlocking Details |
| Owned and controlled by Morpho DAO | 35.40% | Locked for 3 years, linear release thereafter |
| Distributed to protocol users and participants | 4.90% | Locked for 2 years, 100% released at TGE |
| Allocated to ecosystem development | 6.30% | Locked for 3 years, linear release thereafter |
| Rewarded to contributors | 5.80% | 6-month lock-up, then 3-year linear release |
| Reserved for strategic partners | 27.50% | Locked for 4 years, linear release thereafter |
| Allocated to founders | 15.20% | Vesting over 3 years, additional 2-year lock from 2025 (latest full release by 2028) |
| Rewarded to early contributors | 4.90% | 6-month lock-up, then 3-year linear release |
Project Highlights
None
Investors
In mid-2022, Morpho raised $18 million in funding, led by a16z and Variant, with participation from Coinbase Ventures and 80 other institutions and individual investors. Earlier this year, Morpho Labs secured $50 million in funding, led by Ribbit Capital, with contributions from a16z crypto, Coinbase Ventures, IOSG, Fenbushi, Robot Ventures, and over 40 other firms.
Community
Twitter followers: 43,174
Special Economic Model
None
Future Outlook
The decentralized lending sector has consistently ranked among the top DeFi categories in terms of capital capacity, surpassing DEXs in TVL. Lending projects also demonstrate stronger profitability. Morpho's P2P lending protocol (or rate optimizer) addresses inefficiencies in fund utilization within Aave-like protocols. Morpho Blue adopts a Uni V4-like approach, focusing on foundational financial services while allowing third parties to build atop its modules.
Morpho's Optimizer retains the credibility of Aave and Compound, fostering trust. However, Morpho Blue is a standalone product, and large-scale adoption may be cautious due to past incidents like Euler's exploit. While Aave could potentially replicate Morpho Blue’s models, the latter provides an open experimental environment for lending innovation. Whether such models could challenge Aave remains to be seen.
Basic Information
Project introduction: Morpho is a lending protocol built on Ethereum, fundamentally utilizing Aave and Compound as capital buffer pools. It optimizes interest rates for lenders and borrowers through matching mechanisms. For users, Morpho ensures they receive at least the same rates as Aave or Compound. Since Morpho is built on these protocols, it fully inherits their risk parameters and brand credibility. Currently, the Morpho protocol has two main versions: Morpho Blue and Morpho Optimizers.
Token Full Name: Morpho
Token Symbol: MORPHO
Project Website: https://morpho.org
Documentation: https://docs.morpho.org
Blockchain Explorer: https://etherscan.io/token/0x58D97B57BB95320F9a05dC918Aef65434969c2B2
Liquidity Information: None
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CoinW Institute
2024/11/21