# Morpho Fees Methodology

## 1. Overview

Fees measures the total interest accrued by borrowers across Morpho Blue and Morpho Optimizers. For Morpho Blue, interest is captured directly from on-chain accrual events across multiple chains. For Morpho Optimizers on Ethereum, interest is derived from three sources: Morpho Optimizer's aggregate supply position in Aave V3, peer-to-peer matched positions across Aave V3, Aave V2, and Compound, and pool-routed positions on Aave V2 and Compound. COMP incentive rewards distributed to Morpho Optimizer's account are also included as a fee component. This metric reflects the total economic value generated by borrowers using Morpho's lending products.

## 2. Data sources

- **Blockchain events**: `AccrueInterest` events from `Morpho Blue` contracts for Morpho Blue markets, covering Ethereum, Base, Arbitrum, Optimism, and 15 other chains; `Mint`, `Burn`, and `BalanceTransfer` events from `AToken` contracts plus `ReserveDataUpdated` events from `LendingPool` contracts for Morpho Optimizers' Aave V3 supply-side interest on Ethereum; `P2PTotalsUpdated` events from `AaveV3Morpho` contracts and `P2PAmountsUpdated` events from `EntryPositionsManager` and `PositionsManager` contracts, combined with `IndexesUpdated` events from `AaveV3Morpho` contracts and `P2PIndexesUpdated` events from `AaveInterestRatesManager` and `InterestRatesManager` contracts for peer-to-peer interest on Ethereum; `Supplied`, `Withdrawn`, and `SupplierPositionUpdated` events from `EntryPositionsManager` and `PositionsManager` contracts for pool supply interest on Ethereum; `DistributedBorrowerComp` and `DistributedSupplierComp` events from `Comptroller` contracts for COMP reward tracking on Ethereum
- **External data**: End-of-day price feeds for borrowed and supplied assets

## 3. Step-by-step calculation

### Component A: Morpho Blue interest accrual

- **Purpose**: Capture total interest accrued in each Morpho Blue isolated lending market
- **Logic**: `AccrueInterest` events from `Morpho Blue` contracts are parsed and the `interest` field is extracted, representing the total loan asset interest accrued across all borrowers in a market for that block. Events are aggregated by day and market. Markets listed in the interest denylist are excluded - these are markets where oracle anomalies cause significant spikes in reported interest accruals, specifically GMORPHO/cbBTC on Base, PAXG/USDC on Ethereum, K/USDC on Arbitrum, and stdeUSD/USDC on Ethereum. Markets in the broader market denylist - covering exploited positions and bad-debt markets - are excluded upstream in the market status change pipeline.
- **Key fields**: `interest` (total accrued interest per block event), `market_id` (market identifier)

### Component B: Morpho Optimizers - Aave V3 supply-side interest

- **Purpose**: Measure interest earned on Morpho Optimizer's aggregate supply position held in Aave V3 pools
- **Logic**: The scaled principal balance of Morpho Optimizer's position is reconstructed by accumulating `Mint`, `Burn`, and `BalanceTransfer` events from `AToken` contracts, filtered to events involving the Morpho Optimizer account address. The Aave V3 liquidity index is tracked from `ReserveDataUpdated` events from `LendingPool` contracts. Interest between successive index updates is calculated as the previous scaled principal balance multiplied by the change in liquidity index, normalized by Aave's index precision. This captures supply-side interest flowing through Morpho Optimizer's aggregate Aave V3 position on Ethereum.
- **Key fields**: `amount` (aToken transfer quantities), `liquidity_index` (cumulative supply interest index), `balance_increase` (accrued interest component within Mint and Burn events)

### Component C: Morpho Optimizers - peer-to-peer interest

- **Purpose**: Measure interest accrued on peer-to-peer matched positions across Aave V3, Aave V2, and Compound
- **Logic**: Outstanding P2P supply balances are tracked from `P2PTotalsUpdated` events from `AaveV3Morpho` contracts and `P2PAmountsUpdated` events from `EntryPositionsManager` and `PositionsManager` contracts. Amounts are normalized by decimal precision and a block-weighted daily average outstanding supply is computed per market. The P2P borrow index is derived from `IndexesUpdated` events from `AaveV3Morpho` contracts and `P2PIndexesUpdated` events from `AaveInterestRatesManager` and `InterestRatesManager` contracts, and the daily index change is computed. Peer-to-peer interest is then the product of the outstanding supply and the daily index change: `outstanding_p2p_supplies × p2p_borrow_index_delta`.
- **Key fields**: `amount` (P2P supply balance snapshot), `p2p_borrow_index` (cumulative P2P interest index)

### Component D: Morpho Optimizers - pool supply interest

- **Purpose**: Measure interest accrued on pool-routed supply positions on Aave V2 and Compound
- **Logic**: Pool supply positions per user are tracked from `Supplied`, `Withdrawn`, and `SupplierPositionUpdated` events from `EntryPositionsManager` and `PositionsManager` contracts. Amounts are normalized by decimal precision and a block-weighted daily average outstanding supply per user per market is computed. The pool supply index is tracked from the same index update events used in Component C, and the daily change is derived. Pool interest is: `outstanding_pool_supplies × pool_supply_index_delta`.
- **Key fields**: `amount` (pool supply balance per user), `pool_supply_index` (pool interest rate index)

### Component E: Morpho Optimizers - COMP incentive rewards

- **Purpose**: Include COMP distributed to Morpho Optimizer's account as additional fee income
- **Logic**: `DistributedBorrowerComp` and `DistributedSupplierComp` events from `Comptroller` contracts are filtered to events where the borrower or supplier address matches Morpho Optimizer's account address. The `compDelta` field represents COMP distributed per event. These amounts are summed by day and classified as incentive income, distinct from interest income.
- **Key fields**: `compDelta` (COMP distributed per event)

### Component F: USD conversion and aggregation

- **Purpose**: Normalize all fee amounts to USD and combine across all products and chains
- **Logic**: Fee amounts from Components A through E are normalized by asset-specific decimal precision using asset metadata. Decimal-corrected amounts are multiplied by end-of-day asset prices. All fee components are aggregated by day, chain, and product. Days with no events are zero-filled to ensure a continuous time series.

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

Total value users pay to use a protocol (gross fees, user-paid fees).

Fees

Morpho

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.

MorphoMORPHO

Fees

Fees

Competitive landscape

Chain breakdown