#morpho $MORPHO

It is a decentralized and non-custodial lending protocol that operates on networks like Ethereum, combining a direct peer-to-peer (P2P) matching model with liquidity pools like Aave and Compound. This reduces the price discrepancies between lending and borrowing and improves capital efficiency. If there is no direct counterparty, Morpho completes through liquidity pools, ensuring continuous asset generation for its yields.

Mechanism of Action

Direct Matching: The protocol attempts to match lending and borrowing requests directly between parties, making the process more efficient and reducing price spreads.

Integration with Liquidity Pools: In the absence of direct matching, Morpho uses liquidity pools like Aave and Compound to ensure continuous capital operation and yield generation.

Features

Decentralized and Non-Custodial: User assets are not held in custody, meaning they retain full control over them.

Creation of Custom Markets: Users can create their own lending markets with customizable parameters such as collateral type and interest rate model.

Enhanced Yield Vaults: Provides opportunities for users to deposit their assets in enhanced (Vaults) to achieve yield.