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Morpho Overview

Introduction

Morpho is a decentralized lending protocol with different entities and individuals contributing to its development and adoption. As a result, the documentation refers to different areas of “Morpho” which are worth distinguishing.

  • The Morpho Protocol:
    A decentralized, noncustodial lending protocol implemented for the Ethereum Virtual Machine.

  • The Morpho Interfaces:
    Multiple web interfaces allowing easy interaction with the Morpho protocol. Those interfaces are ways to interact with the Morpho protocol.

  • Morpho Governance:
    A governance system for governing the Morpho Protocol, enabled by the MORPHO token.

  • Morpho Association:
    A France-registered association that regroups the main contributors to promote the development and the decentralization of the Morpho Protocol. The Morpho Association hosts one of the Morpho Interfaces.

Morpho

Morpho is a simple lending primitive layer that allows the creation of immutable and efficient lending markets in a permissionless way.

The protocol comes with EVM smart contracts which facilitate interactions and integrations.

Overview

Morpho is a decentralized protocol enabling the overcollateralized lending and borrowing of crypto assets (ERC20 & ERC4626 Tokens) on the Ethereum Virtual Machine. The protocol is implemented as an immutable smart contract, engineered to serve as a trustless base layer for lenders, borrowers, and applications.

Morpho is licensed under a dual license (BUSL-1.1 and GPLv2) which you can find here. Once deployed, Morpho will function in perpetuity, provided by the existence of the blockchain.

Key Concepts

Overcollateralized lending in Morpho involves:

  • Collateralization: Users provide collateral to borrow other assets
  • Risk Management: Liquidation mechanisms protect the protocol through loan-to-value ratios
  • Interest Accrual: Dynamic interest rates based on market conditions
  • Open Participation: Anyone can lend or borrow through the protocol
  • Non-custodial Design: Users maintain ownership of their assets at all times