Recently, every time I scroll through news in the circle, I feel a strong sense of dislocation: In the past, when mentioning Morpho, words like geek players, vault strategies, and LLTV, which are more 'insider', would come to mind; but now, looking at its latest developments, the scene is completely different—on one side, there's the World App, which serves as an entry point of a 'super app', allowing tens of millions of ordinary users to access on-chain lending with just a few taps on their phones; on the other side, Coinbase has expanded its previously BTC-only on-chain loans to ETH, where users only see 'borrow USDC' on the front end, while all the risk control, settlement, and liquidity scheduling at the core is quietly handled by Morpho. For someone like me, who has been tinkering on-chain for many years, Morpho has transformed from 'a protocol' to 'an invisible lending layer that is everywhere'.
Let’s first talk about the World App line; many people actually have not realized how exaggerated this matter is. Morpho clearly stated in the Morpho Effect in April: it is now providing underlying capabilities for World DeFi. The Worldcoin Foundation has put up 5 million dollars as incentives, and the 25M+ World App users can directly perform lending and borrowing actions through a Morpho Mini App in the App, with different teams like Paperclip Labs, Legend, and Oku providing various styles of experience—some are simplified mobile versions while others are Web interfaces for advanced traders. Previously, on-chain lending felt more like "self-service banking," where you had to connect your wallet and recognize assets yourself; now, World App essentially turns Morpho into a "backend service buried in the menu," where users simply click "earn income" or "borrow a bit of dollars" within a familiar App, thus connecting to a globally unified lending network.
The larger context is that the entire landscape of crypto collateral lending is also expanding. The latest data shows that the global scale of crypto collateral loans has reached a new high of 73.6 billion dollars, two-thirds of which is captured by DeFi. In this lane, Coinbase has been racing ahead, relying on its deep binding with Morpho. This explains why World App chose Morpho to be its DeFi engine: when a protocol is already facilitating on-chain loans worth billions of dollars for mainstream compliant exchanges, it is no longer just a "testing ground for new protocols" but in some sense a "foundation for the industry."
Coinbase's rhythm has taken the phrase "invisible lending layer" to the extreme. In previous articles, I talked about the product of BTC collateralizing USDC: since its official launch in January this year, the disclosed figure is that over 950 million dollars in loans have been issued, with over 800 million USDC currently unpaid, and the collateral side is more than 1.4 billion dollars in cbBTC positions, with an interest rate of around 6%, fully supported by Morpho's market on Base. The latest round of upgrades is even more aggressive—Coinbase has directly expanded this model to ETH: now users can not only collateralize with BTC but also with ETH to borrow USDC, with a single user's limit raised to 1 million dollars. The expanded ETH loan product, along with the BTC product, has pushed Coinbase's on-chain lending capability significantly towards "multi-asset collateral and unified engine." For those of us who manage positions, the most intuitive change is that whether you are a diamond hand holding BTC or a long-term gambler on ETH, there is now a compliant channel for "getting liquidity without selling coins," and as long as I understand interest rates and liquidation parameters, I can use this channel for more refined cash flow and tax planning.
Interestingly, Morpho has not focused solely on the extremes of "top CEXs + super Apps," but has also restructured the entrance aimed at "native DeFi users." The most typical case is Seamless 2.0: the first native lending protocol on Base, originally running a fork of Aave v3, has completely migrated most of its Earn infrastructure to Morpho Vaults this year, launching a complete set of products including Seamless USDC Vault, WETH Vault, and cbBTC Vault. In the Base ecosystem, this is described as a "major migration at the infrastructure level"—meaning that even projects that were originally "lending protocols" are starting to acknowledge that Morpho's Stack is more suited for the underlying layer, transforming themselves into a layer focused on front-end experience and strategy design. For someone like Azou, who is always looking for new opportunities across various L2s, this means: when you open Seamless, thinking you are using some native Base protocol, your position is actually already flowing within Morpho's unified risk engine, showcasing the power of "protocols on top of protocols."
To make this state of "Morpho everywhere" truly operational, the team has done a lot of subtraction on front-end tools. Morpho Lite is a very simple-looking yet crucial part of the ecosystem: the officials describe Lite as "a minimalist open-source App that retains only the core functions of Earn and Borrow," cutting out all complex strategies and flashy UIs, leaving a clean template that can be forked and deployed by any chain or project. The benefit of this is that if you are a new L2 or a vertical application looking to give your users a "native lending entry," you don’t need to develop from scratch; just deploy a version of Lite and connect to Morpho's market configuration, and you can launch a simple yet reliable Earn/Borrow interface in a very short time. For users, what they see may only be the words "XX chain lending"; for someone like me who has seen the underlying layer, it is clear that behind it is actually a standardized Morpho front end.
Another very critical piece on the developer side is the Earn component of Base's OnchainKit. The Base team has directly integrated an "Earn module" into its development toolchain, allowing developers to integrate any Morpho Vault into their App with just a few lines of code on the front end, compressing the time from "weeks of integration" to "minutes to complete." This is a godsend for my friends who are developing wallets and social DApps on Base: previously, if you wanted to give users an entry for "on-chain deposits earning interest," you had to connect protocols, write interactions, and create risk control prompts. Now, by using the Earn component, the entire UI logic, risk prompts, and APY displays are ready-made. The front end no longer struggles with "which lending protocol to connect to," but defaults to "using Morpho's Vaults for this part," drastically reducing development costs to nearly negligible levels.
Of course, just paving the way for "novices" and "developers" is not enough; those who truly help you select markets, allocate positions, and design risk curves, the "strategy players," also need their own specialized tools. This is why Morpho Prime was singled out this year as a new product line. The positioning of Prime is very straightforward: it is not aimed at ordinary users but rather a comprehensive set of tools for Vault curators and advanced users, ranging from the Curator App to the Rewards App, enabling this group to manage positions, allocate markets, and track their rewards and performance more professionally. (Morpho) This has formed a rather healthy division of labor within the ecosystem: World App, Coinbase, Seamless, and Stable are responsible for bringing terminal users in; Morpho Lite and OnchainKit Earn lower the "access threshold" for all front-end developers; Prime brings those who truly understand strategies and risk control to the forefront, allowing them to manage funds for the entire network in the long term through mechanisms like Vault and Olympics. As an ordinary user, Azou, I don’t necessarily have to delve into Prime myself, but I will pay special attention to whether the Vault where I place my money is managed by a curator who clearly articulates the logic in governance forums using Prime.
The changes on the front-end side and the upgrades in funding sources are interconnected. The Stable line is a typical example: it aims to create a "stablecoin chain" and a Stable Pay payment App, bringing stablecoins like USDT and PYUSD into everyday payment scenarios, rather than just running back and forth between exchanges. To achieve this, it directly uses Morpho as the default lending network for the entire ecosystem—users and businesses with idle stablecoins in Stable will have them routed to Morpho's market to earn interest, while ensuring that they can be instantly moved out during payments and transfers. For someone like me who has long been focusing on stablecoin narratives, this essentially tells everyone: in the future, when you see "balance earning interest" in some payment App, it is increasingly likely that it is Morpho's open lending network running behind it, rather than a black-box product operated by the platform.
All of this combined constitutes the "invisible lending layer" I refer to. The Ethereum Foundation has placed 2400 ETH and about 6 million dollars in stablecoins under the management of the Morpho ecosystem; Seamless, a native Base protocol, has migrated its entire Earn infrastructure to the Morpho Stack; World App uses Morpho as its DeFi engine, directly connecting 25 million users to on-chain lending; Coinbase has expanded from BTC collateral loans to ETH collateral loans in one go, aiming to make on-chain loans worth hundreds of billions of dollars a mainstream product. From Azou's perspective, this is not a singular explosive "good news" but rather a slow yet solid structural change: lending is transitioning from being "fixed within a few protocol interfaces" to being "embedded into various Apps, wallets, and CeFi products' underlying logic," with Morpho being almost at the forefront of this trend.
If you ask me, at this point in time, how ordinary users should leverage the latest rhythm of Morpho, my personal approach is layered in three tiers. The outer layer consists of those who completely do not want to set up their own wallets, who can start with front ends like Coinbase and Stable, checking whether it states "powered by Morpho" in the description, using a small portion of BTC, ETH, or USDC as collateral for lending, thereby establishing an intuition for "on-chain lending running in the background." One step in is for those who are already accustomed to using on-chain wallets; they can spend more time studying examples like Seamless and World DeFi, which directly integrate Morpho into their products, learning to distinguish "who developed the front end" from "who is bearing the risks on the back end," and trying to select those entrances that use Morpho at the underlying level and have a clear risk control team. The innermost layer is for those who are already involved in product development, community building, or strategy design; they should seriously evaluate tools like Morpho Lite, OnchainKit Earn, and Prime, and think carefully about which side of this lending network they want to stand on—whether to provide their users with a simple Earn UI or to design a long-term strategy at the Vault level, using time to earn the dividends that truly belong to the "builders."
For me, as Azou, the real impact brought by Morpho's latest developments lies not in how high the APY of a single vault is, but in how it turns "lending," which used to be a very professional and heavy matter, into a line of code, a button, or an entry that can be quietly called by countless Apps. When World App users swipe on their phones, when Coinbase users click "borrow USDC" on the interface, and when Seamless users switch positions on Base, the underlying engine that connects assets, interest rates, and risks is likely Morpho. Because of this, I will study this Stack more seriously than before, clearly understanding its governance rhythm and security boundaries, because once you realize that "it could become the public utility for multiple chains and numerous Apps," your demands for it will not just be "can you give me a bit more interest?" but "can it withstand the next cycle?"
