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Rewards for Lenders

Vault depositors on Morpho can earn additional rewards beyond base lending yield through incentive campaigns. These rewards significantly enhance total returns and are a key feature of competitive earn products.

Overview

When you deposit into a Morpho Vault, you can earn rewards from two distinct sources:

  1. Direct Vault Campaigns: Rewards distributed directly to vault depositors. Morpho Vault V2 allocating into Morpho Vault V1 or Morpho Blue Variable Rate Markets will be detected on Merkl (see rewards section) and forward the rewards to its users.
  2. Forwarded Market Campaigns: Rewards earned from underlying markets where the vault allocates liquidity

The total yield a depositor earns combines the native lending APY with reward APR from both sources:

Net APY = Native Vault APY + Vault Campaign APR + Forwarded Market Campaign APR - Performance Fee - Management Fee

What Makes Vault Rewards Unique

Reward Forwarding

This is the key differentiator for vault depositors. When a vault allocates liquidity to underlying Morpho Blue Variable Rate Markets that have active supply campaigns, those market-level rewards are automatically forwarded to vault depositors.

How it works:
  1. A market has an active supply campaign
  2. Your vault allocates liquidity to that market as a supplier
  3. The vault contract earns those market rewards
  4. Rewards are attributed to individual vault depositors by Merkl's offchain computation
  5. You claim these forwarded rewards directly
Why this matters:
  • You benefit from active campaigns across the markets your vault uses
  • Vault curators optimize allocations, and you receive rewards automatically
  • More capital-efficient than directly supplying to individual markets

Complete APY Components

The net APY shown to users combines multiple components:

Net APY = Native Vault APY + Rewards APR - Performance Fee - Management Fee

Where:

  • Native Vault APY: Native vault yield before fees and rewards
  • Rewards APR: Vault rewards + weighted market rewards
  • Performance Fee: Applied only to base APY
  • Management Fee: Applied to total assets deposited in the vault

Distribution System

Rewards distribution has migrated from the Morpho URD system to Merkl. All campaigns from July 2025 onwards use Merkl exclusively. For unclaimed historical rewards, visit rewards-legacy.morpho.org.

The claiming process is identical for all Morpho users, regardless of whether they're depositors or borrowers.

For complete details on distribution systems, see:

Learn More

For comprehensive information about integrating rewards:

Implementation

For practical implementation guidance specific to earn products, see: