How can distributors generate revenue on Morpho?

There are different ways to generate revenue on Morpho.

Curators and distributor channels have different ways to charge fees.

A distributor channel is any platform, application, or service that integrates Morpho's functionality to offer it to their own users. This includes wallets, DeFi aggregators, portfolio management apps, or custom interfaces that embed Morpho vaults. These distributors make Morpho accessible to users who might not otherwise directly interact with the Morpho protocol, and they can earn fees by facilitating these interactions.

To generate revenue, a distributor has several possibilities developed below:

Own its own revenue layer (a Fee Wrapper or a Vault V2 Wrapper)
Have an agreement with a curator (onchain or offchain)

Fees

Morpho Vault V2 can charge two types of fees: a performance fee on native yield and a management fee on assets under curation. See Fee for detailed fee mechanics and caps.

Architecture

Here is the setup of the current Earn architecture with USDC as an example

Here is the vault model illustrating asset flow in terms of allocation

Examples of possible configurations

Model	Control	Trust Required	Complexity	Best For
Fee Wrapper	High	None	Low	B2B distribution, per-customer vaults
V2 Wrapper	High	None	Low	Independent distributors
Offchain Agreement	Shared	High	Medium	Strategic partnerships
Onchain Splitter	Shared	None	High	Formal trustless partnerships

1. Fee Wrapper

A Fee Wrapper is a Vault V2 configured in a specific, constrained mode that enables distribution channels to add a fee layer on top of an existing Morpho Vault V2.

Fee Wrappers are the recommended approach for B2B distribution, per-customer vaults, and white-label products. They provide high control with no trust required and low complexity.

For full details on architecture, gates & non-custodiality, deployment, and integration, see the dedicated Fee Wrapper page.

The fee recipient wallet must be able to interact with the vault. Fees are always minted as shares. To convert them to the underlying asset, the fee recipient must call redeem() at some point. Two options:

Direct redemption: the fee recipient periodically calls redeem() themselves.
Delegated redemption: the fee recipient calls approve(claimerAddress, type(uint256).max) once (approval on the vault receipt token, not the underlying asset), then another address can call redeem(shares, feeRecipient, feeRecipient) on an ongoing basis.

The fee recipient must be an address capable of interacting with the vault (EOA, smart wallet, multisig, etc.). A fully passive address that never interacts with the chain won't be able to actually receive the fee in the underlying asset.

2. Offchain Agreement Model

Setup: Distributor and curator establish a legal revenue-sharing agreement for liquidity provided.

Two Options:

Option A - New Dedicated Vault:

Curator launches a new dedicated vault exclusively for the distributor's users
Fee split negotiated up-front (e.g., 50/50 on performance fees)
Clean attribution of liquidity and fees

Option B - Existing Vault:

Distributor directs users to existing vault
Revenue share calculated based on tracked liquidity contribution
Requires tracking mechanism (transaction mapping, user addresses, time-weighted deposits)

Considerations:

Legal contract enforces agreement
Option B requires reliable attribution system
Settlement handled offchain (periodic payouts)

Use Case: Best for strategic partnerships where trust exists or when onchain complexity isn't warranted.

3. Onchain Splitter Contract Model

Setup: Smart contract automatically splits fees between curator and distributor based on pre-defined terms.

Requirements:

Dedicated new vault for the partnership
Splitter contract receives fee recipient role
Automated distribution of fees to both parties

Fee Flow:

Vault accrues performance/management fees
Fees sent to splitter contract
Contract automatically distributes per agreement (e.g., 60% curator / 40% distributor, or 50/50)

Advantages:

Trustless execution
Transparent onchain tracking
No manual settlement required

Trade-offs:

Requires dedicated vault (curator unlikely to share existing vault)
Additional smart contract complexity
Gas costs for splitting operations

Use Case: Best for formal partnerships requiring trustless, transparent revenue sharing with onchain guarantees.