The core value of Morpho lies in its rethinking of DeFi lending risks and efficiency. It has evolved from an early optimizer into a customizable isolated market framework.
It has several main features:
1. Freedom of market creation: Anyone can define and launch a lending market, including assets, LTV, interest rate models, etc., without lengthy governance votes.
2. Risk isolation: This is key. Each market (Vault) is independent. This completely resolves the systemic risks of traditional protocols where all succeed or fail together. Users lend and borrow in specific pools, greatly increasing safety and flexibility.
3. Dynamic interest rate (IRM): Its interest rate model is very sensitive. For example, when utilization skyrockets from 0% to 100%, the interest rate can automatically jump from 1% to 16%. This mechanism ensures maximum capital efficiency and prevents capital stagnation.
4. Institution-friendly: The introduction of the risk curator role and clear risk delineation gives Morpho the potential to attract institutional funds, evolving it to an infrastructure-level solution.
In the future, Morpho's plans for fixed interest rates and collateralized liquid assets (revolving loans) are new highlights.
