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 Earnings Methodology

## 1. Overview

Earnings is calculated as the net value retained by Morpho after all onchain expenses are subtracted from protocol revenue. Protocol revenue is currently recognized as zero because the protocol fee switch has not been activated, meaning all interest fees are directed to supply-side lenders. Expenses are comprised of token incentives distributed to bootstrap liquidity across Morpho Blue and Morpho Optimizers. Consequently, earnings are represented as a negative value, reflecting the net cost of token distributions used for protocol growth.

## 2. Data sources

- **Blockchain events**: `Claimed` events from `UniversalRewardsDistributor` contracts, and ERC-20 transfers from the Morpho rewards multisig address to the Angle distributor contract, covering Ethereum and Base
- **External data**: End-of-day price feeds for the distributed reward assets

## 3. Step-by-step calculation

### Component A: Protocol revenue determination

- **Purpose**: Establish the protocol's share of interest fees.
- **Logic**: Protocol revenue is set to a constant value of zero. Although interest fees are generated across Morpho Blue and Morpho Optimizers, the protocol fee switch has not been activated, meaning all interest fees are directed entirely to supply-side participants.

### Component B: Legacy and market reward tracking

- **Purpose**: Capture incentives distributed via the universal rewards distributor.
- **Logic**: `Claimed` events are parsed from `UniversalRewardsDistributor` contracts. The reward amounts and asset addresses are extracted from the event logs.
- **Key fields**: `amount` (reward quantity), `token_address` (reward asset identifier).

### Component C: Vault reward tracking

- **Purpose**: Capture incentives distributed to vaults via the Angle distributor.
- **Logic**: ERC-20 transfers are tracked from the Morpho rewards multisig address to the Angle distributor contract. The transfer amounts and asset addresses are extracted from these transactions.
- **Key fields**: `amount` (transfer quantity), `token_address` (transferred asset identifier).

### Component D: Expense valuation and USD conversion

- **Purpose**: Normalize and convert incentives to USD.
- **Logic**: Reward amounts from both legacy and vault distributions are normalized by their respective asset decimal precisions. The normalized amounts are multiplied by end-of-day asset prices to determine the daily expense value in USD.

### Component E: Earnings aggregation

- **Purpose**: Calculate the final earnings metric.
- **Logic**: Daily expenses (incentives in USD) are subtracted from daily protocol revenue (zero). The resulting negative values are aggregated daily to represent the net onchain earnings of the protocol.

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

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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