What are the Warnings on the Morpho Interface?

In Morpho Blue, each parameter is selected at market creation and persists in perpetuity. Or, in other words, are immutable. The LLTV and interest rate model must be chosen from a set of options approved by Morpho Governance.

Once a market is created, users can either lend/borrow assets to/from it with certainty that:

1. It will persist as long as Ethereum exists.
2. The parameters of the market will never change.

As a reminder, a market is composed of 5 parameters:

• Collateral Asset,
• Loan Asset,
• Liquidation-Loan-To-Value,
• Oracle,
• Interest Rate Model.

You may see Info Labels or Token Warnings while using and navigating throughout the Morpho Interface. These warnings are to alert you to the potentially heightened risk in using specific markets, vaults, oracles or tokens.

How are Interface Warnings determined?

There are 3 existing warning levels:

• RED: Any collateral asset, loan asset, deposit asset, oracle, vault curator that does not fit the listing criteria (seen below) will require a user to opt into interacting with that aspect of Morpho Blue.
• YELLOW: This level of warning is a “soft warning” that alerts a user to a potential abnormality, but does not require the user to “opt in” to the action.
• Not available: Manually curated list created by Morpho Association will block tokens that violate trademarks, that have proven to be scams, or otherwise based on legal considerations.

The table below is explicitly explaining some reasons why warning level may appear on:

Morpho Blue

Label	Criteria	Levels
unrecognized_collateral_asset	The collateral asset used in the market is not a part of our token whitelist.	RED
unrecognized_loan_asset	The loan asset used in the market is not a part of our token whitelist.	RED
unrecognized_oracle	The oracle asset used in the market has not been added to our whitelist.	RED
unrecognized_oracle_feed	This market oracle has feed(s) that are not part of our oracle feeds whitelist.	RED
bad_debt_unrealized	This market has significant unrealized bad debt (>25 BPS total supply)	RED
bad_debt_unrealized	This market has some unrealized bad debt (>$10k)	YELLOW
bad_debt_realized	This market has some realized bad debt (>10 BPS of total supply)	YELLOW
hardcoded_oracle	This market is using a hardcoded value in its oracle.	YELLOW
unrecognized_lender	This market isn’t used in a vault where the curators has >$200k of assets under management.	YELLOW
low_liquidity	This market has less than $200k supplied to it.	YELLOW

MetaMorpho

Label	Criteria	Levels
unrecognized_deposit_asset	The asset to deposit into this vault is not recognized.	RED
unrecognized_vault_curator	Vault curator has less than $200k in AUM over a trailing 30d period.	RED

The token whitelist is available here and the oracle feed whitelist here.

Refer to this risk documentation to be sure you understand all the risks.

Policy

Asset blocking policy

The Morpho protocol is a self-executing, permissionless, decentralized series of smart contracts that cannot be changed by anyone except the DAO for given parameters.

Morpho Association maintains one of many ways to interact with the Protocol (the Morpho Interface for instance), and as a non-profit association based in France is subject to certain laws and regulations.

As such, there may be certain circumstances under which Morpho Association blocks access to certain markets and vaults through our the interface provided.

Criteria for Restricting Access on Morpho Association Interfaces

1. Morpho Association will block some component of the Protocol for the following reasons:
   1. Risks to users. Morpho Association believes there are technical, fraud, or other risks that could significantly affect user safety.
   2. Legal and regulatory requirements.
   3. Fraud allegations.
2. Morpho Association will block individual or smart contract addresses that are subject to U.S. government sanctions or associated with certain types of illegal activity.
3. Morpho Association may block individual or smart contract addresses for any other reason at their discretion. For example, Morpho Association might have reason to believe that an address is associated with fraud, theft, or market manipulation, or that a smart contract has unacceptable security vulnerabilities.

Additional disclosures

Interface Warnings are created using information from third-party data providers. Morpho Association does not guarantee their accuracy and makes no representations or warranties about their relevance or currentness. The Morpho Protocol operates on a permissionless and decentralized basis, allowing Markets and Vaults to be established and administered by any third-party individual or entity. Any information provided by the Morpho Association on Vaults, Markets or any of their parameters does not constitute an endorsement of the Markets or Vaults and is provided solely for informational purposes. It does not represent an endorsement, recommendation, or any form of advice on how to engage with or utilize the Morpho Protocol.

Morpho Association Token Lists and Interface Warnings are not investment advice and should not be construed as such. Morpho Association strongly advise that before engaging in any financial, legal, technical, or other significant decisions related to the Morpho Protocol, you perform your own research (including, but not limited to, an analysis of the market or vault's structure, the assets involved, the parties responsible for its creation and management, and the potential risks and rewards associated with participation) and consult with an independent professional who is licensed and qualified in the relevant field. Such advice is crucial to ensure that your decisions are well-informed and take into account the specific nuances and complexities of your situation.