Public Allocator
How Morpho vaults provide on-demand liquidity to isolated markets.
Morpho markets isolate risk. That isolation also separates liquidity: one market can run short while a vault has assets elsewhere, including idle assets held directly by the vault.
The Public Allocator connects that liquidity without merging the markets. Anyone can request a reallocation, but addresses with the vault's allocator role set the boundaries. The borrower gets deeper liquidity while each market keeps its own collateral, oracle, and risk profile.
Why it exists
Suppose a borrower needs 1,000 USDC from one market, but only 600 USDC is available there. A vault that supplies the market may hold the missing 400 USDC in another market or as idle assets.
The Public Allocator can move that 400 USDC into the target market before the borrow. An application can combine both actions, so the user submits one transaction. The caller never takes custody of the vault's assets.
Without the Public Allocator, the borrower must reduce the loan, wait for liquidity, or split the position across markets.
Vault V2 Public Allocator
Vault controls
The curator sets the vault's strategy and caps, then appoints addresses to the allocator role. An address with that role configures the Public Allocator boundaries:
| Control | What it decides |
|---|---|
| Active adapter | Which supported Morpho market connections can participate |
| Pull from idle assets | Whether the allocator can deploy assets held directly by the vault |
| Pull from market | Which adapter and market pairs can provide assets |
| Target ceiling | The maximum resulting allocation for an adapter and market pair |
| Penalty | The percentage of moved assets that the caller pays to the vault |
All existing Vault V2 caps remain binding. The Public Allocator can use available room inside those limits, but it cannot expand them or change the vault's strategy.
The Public Allocator penalty is separate from any in-kind redemption penalty configured by the vault.
What users gain
- Larger borrows and loan-asset withdrawals can use liquidity held elsewhere by participating vaults.
- One bundled transaction can reallocate assets and complete the user's action together or not at all.
- Markets keep isolated risk even when applications present their liquidity as one deeper source.
- Vault depositors receive any configured penalty when their liquidity is moved.
When liquidity is unavailable
The Public Allocator does not guarantee every request. A reallocation can be limited by its settings, the vault's caps, available idle assets, or liquidity in source markets. Another transaction can also change the available amount before execution.
Applications should show only current, eligible liquidity and rebuild the transaction from fresh data before submission.
Follow Find and use Vault V2 Public Allocator liquidity for the SDK algorithm, data-loading options, and transaction flow.