Morpho isn't charity—it’s a business sustaining itself through smart economics. Generating $20 million monthly in fees while rewarding users, it balances growth, security, and decentralization. Understanding its money flow reveals why it's built to last in DeFi's cutthroat world.
Revenue sources: Tiny spreads on P2P matches (0.01-0.1%), vault curator fees (10% of yields), flash loan premiums. High volume ($4.3 billion loans) compounds small cuts into big revenue.
Fee distribution: 70% to lenders/borrowers via better rates, 20% to MORPHO stakers, 10% to treasury for audits/grants.
Rewards: MORPHO emissions tied to TVL—farm efficiently, earn governance tokens. 2025: 5% APY extra on key markets.
Sustainability: No VC dump risk—team tokens locked 4 years. Treasury funds bug bounties, hires. Break-even at $2 billion TVL; now profitable.
Tokenomics: 1 billion supply, 40% circulating. Buybacks from fees burn tokens, increasing scarcity.
Economics incentivize health: High utilization = more fees = more rewards. Adaptive IRMs prevent rate wars.
Compared to Aave (higher fees, centralized risk params), Morpho aligns users and protocol. No inflation spiral—emissions taper.
Future: RWA fees, V2 intent premiums. Treasury could yield farm itself.
