Lenders can earn on Morpho using Morpho Vaults, noncustodial simple to use lending vaults that optimize yields for depositors. Borrowers can borrow any assets directly from Morpho Markets. Developers and businesses can use different parts of Morpho’s permissionless infrastructure to build any custom use case or application.

Morpho is an open, efficient, and resilient platform that allows anyone to earn yield and borrow assets. At the same time, developers or businesses can create markets, curate vaults, and build a range of applications on its flexible, immutable infrastructure.

MORPHO tokenholders own and govern the protocol. They currently do not take a cut of the interest and third-party token incentives earned by lenders (revenue). Morpho's investors include a16z, Coinbase Ventures, Semantic Ventures, etc.

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Morpho | Data breakdown

# Morpho Active loans Methodology

## 1. Overview

Active loans measures the value of user deposits that are lent out to borrowers. The portion of deposits that borrowers must pay interest on is tracked across Morpho Blue, Morpho Optimizers, and Morpho Midnight, which correlates with the ability of the lending project to generate revenue. Outstanding debt balances are calculated dynamically across various lending markets and peer-to-peer matching pools to reflect the total active borrow volume.

## 2. Data sources

- **Blockchain events**: `CreateMarket`, `Borrow`, `Repay`, `Liquidate`, and `AccrueInterest` events from `Morpho Blue` contracts; `MarketCreated`, `Take`, `Repay`, and `Liquidate` events from `Midnight` contracts; `ReserveDataUpdated` events from `LendingPool` contracts; `Mint` and `Burn` events from `VToken` contracts; `P2PTotalsUpdated`, `P2PAmountsUpdated`, `Borrowed`, `Repaid`, `BorrowerPositionUpdated`, `IndexesUpdated`, and `P2PIndexesUpdated` events from `AaveV3Morpho`, `PositionsManager`, `EntryPositionsManager`, `AaveInterestRatesManager`, and `InterestRatesManager` contracts, covering Ethereum, Arbitrum, Base, Polygon, and 15 other chains
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Morpho Blue active loans

- **Purpose**: Tracks outstanding debt across Morpho Blue markets.
- **Logic**: Market parameters and asset mappings are established using `CreateMarket` events. Cumulative borrow balances are tracked using `Borrow`, `Repay`, `Liquidate` (reducing debt by repaid assets and bad debt), and `AccrueInterest` events. Exploited, distorted, or high-risk markets are filtered out using a predefined denylist, and cbBTC markets on Base are restricted to a specific whitelist of market IDs.
- **Key fields**: `market_id`, `loan_token_address`, `assets`, `shares`, `interest`

### Component B: Morpho Midnight active loans

- **Purpose**: Tracks outstanding debt across Morpho Midnight markets.
- **Logic**: Market configurations are identified using `MarketCreated` events. Outstanding debt balances are calculated cumulatively by adding net debt changes from `Take` events and subtracting repayments from `Repay` events and debt write-offs (repaid units and bad debt) from `Liquidate` events.
- **Key fields**: `market_id`, `loan_token_address`, `units`, `total_units_delta`, `bad_debt`

### Component C: Morpho Optimizers active loans

- **Purpose**: Tracks outstanding debt across Morpho Optimizers (Aave V2, Aave V3, and Compound).
- **Logic**: For Aave V3 Optimizer, scaled principal balances are calculated from `Mint` and `Burn` events from `VToken` contracts and multiplied by the variable borrow index from `ReserveDataUpdated` events. For P2P and pool-based Optimizers, borrow balances are extracted from P2P totals/amounts updated events and pool borrow/repay/position updated events, then multiplied by the corresponding P2P or pool borrow indexes from index update events. Daily balances are weighted by block duration to calculate a daily weighted average.
- **Key fields**: `market_address`, `amount`, `p2p_borrow_index`, `pool_borrow_index`, `variable_borrow_index`

### Component D: Decimal normalization and USD conversion

- **Purpose**: Normalizes active loan balances and converts them to USD.
- **Logic**: Active loan balances for each asset are normalized by decimal precision. The normalized balances are then multiplied by end-of-day asset prices to determine the USD value of active loans.
- **Key fields**: `token_address`, `decimals`, `price_usd`

### Component E: Final aggregation

- **Purpose**: Aggregates active loans across all products and chains.
- **Logic**: Active loan values are summed by day, chain, and product. Missing daily values are filled forward using the last known active loan balance to ensure continuous daily coverage.
- **Key fields**: `timestamp`, `chain_id`, `product_id`, `active_loans`

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Value of loans currently outstanding to borrowers.

MorphoMORPHO

Active loans

Active loans

Competitive landscape

Chain breakdown