Shocked by Morpho, the borrowing interest rate of 0.33% is insane——

Following Silo, the larger @MorphoLabs has also launched support for Pendle LP, currently opening three LP collateral pools for @ethena_labs assets:

🔹LP-sUSDe (25 Sep 2025) / USDT

🔹LP-sUSDe (31 Jul 2025) / USDT

🔹LP-eUSDe (14 Aug 2025) / USDT

The borrowing interest rate for LP-sUSDe (31 Jul 2025) is only 0.33%, a great arbitrage opportunity! The principles and operations are the same as the previous PT collateral——

1）Purchase LP-sUSDe (31 Jul 2025) on @pendle_fi, with an APY of 7.66%.

2）In the Tools section on Pendle, wrap the LP into Wrapped LP.

3）Mortgage your wrapped LP on Morpho to borrow USDT (with an LTV cap of 87%).

4）Use the borrowed USDT to buy LP on Pendle, and repeat the process.

After some calculations, if you invest 1000u and go through 2 cycles, the annualized return can be increased to 22.5%, and you can earn 25X sats points from Ethena, which is double the profit compared to simply holding PT or LP!

However, there are still risks involved. If extreme fluctuations occur (for example, ETH plummets → sUSDe unpegs → PT premium), it could trigger risks.

So, students engaging in circular lending should remember two points:

1. It is strongly recommended to limit to a maximum of two layers and maintain a liquidation buffer of 5%-10%, do not borrow to the limit.

2. The borrowing interest rate will fluctuate, set up monitoring, and if the rate surges, take timely action to prevent liquidation penalties!