I've recently been thinking about a more macro question: What is the ultimate goal of Morpho Blue? Is it really just to compete for that bit of TVL with Aave?
I think it may not be that simple. I have a hypothesis: Morpho's ultimate goal is to completely 'commodify' the act of borrowing, making the underlying service of 'borrowing' nearly 'free'.
This is a very classic internet strategy.
First of all, what is 'commodification'? It means taking a service that was originally complex and had high profits (like Aave's 'lending bank' service, which makes money from 'interest spread') and breaking it down into an extremely standardized, low-cost, public utility that anyone can use.
Let's see how Morpho Blue does it:
Zero Spread: It mechanistically stipulates that 'Supply Rate = Borrowing Rate'. As the 'Protocol Layer', it does not earn the intermediary spread.
Zero Threshold: 'Permissionless' creation of markets. It transforms the 'Token Listing Rights', which was originally monopolized by Aave governance as a 'high-value service', into a 'public function' that anyone can use.
When something is 'zero spread' and 'zero threshold', it becomes 'commoditized'. It is no longer a 'high-profit' business; it has turned into a foundational infrastructure like 'HTTP protocol' or 'water supply networks'.
So the question arises, does the Morpho team learn from Lei Feng? How can they survive without making money?
This is the cleverest part of its design: it transfers 'value capture' from the 'underlayer (Blue)' to the 'upper layer (MetaMorpho)'.
Aave is 'bundled sales': it provides both 'underlayer accounting' and 'risk management', then packages them together to charge you a 'spread'.
Morpho is 'completely decoupled':
Underlayer Blue: Free public accounting facilities.
Upper layer MetaMorpho: Charged 'value-added services'.
Curators (like Steakhouse) take a cut from the 'extra profits' they create by providing specialized 'risk management' and 'strategy configuration' services. Meanwhile, $MORPHO DAO can also capture value by charging protocol fees on MetaMorpho Vaults in the future.
Do you understand? Morpho bets that in the future, the act of 'lending' itself will be as cheap as 'sending an email', worthless. What is truly valuable is the 'services' provided on top of this foundation - such as 'safer asset allocation' and 'higher yield risk strategies'.
It is not competing with Aave for 'banking' business; it is attempting to undermine it by commoditizing and making free the 'foundation' (underlying lending) beneath Aave, thereby forcing Aave to also 'join the fray' and compete with all curators at the 'service layer' (MetaMorpho). This game is much bigger than it appears on the surface.
@Morpho Labs 🦋 Labs 🦋