Morpho Protocol is changing the game in decentralized finance lending and borrowing. Built on Ethereum and Base, it's a non-custodial protocol that optimizes capital efficiency through peer-to-peer liquidity matching, while retaining the security of established DeFi platforms. As of late 2025, Morpho manages over $3.9 billion TVL across both chains, with more than 40 professionally curated vaults.
How Morpho Markets Work
Morpho Markets function as a set of lending pools that are isolated in their pairing of one loan asset to a collateral asset. This, unlike pooled systems where lenders and borrowers share risk, Morpho matches lenders with borrowers directly seeking the same tokens. This cuts down on the spread between supply and borrow rates: Lenders earn more; borrowers pay less.
