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 Supply-side fees Methodology

## 1. Overview

Supply-side fees is measured as the share of interest and incentives generated by Morpho that is distributed to depositors and liquidity suppliers. This metric is represented by the total yield earned by users who supply assets to the protocol. Interest accrued from Morpho Blue and Morpho Optimizers, as well as third-party market incentives, are included. Because a protocol-level fee is not currently retained, 100% of the generated fees are allocated to the supply side.

## 2. Data sources

- **Blockchain events**: `AccrueInterest`, `CreateMarket`, `Supply`, `Withdraw`, `Borrow`, `Repay`, `SupplyCollateral`, `WithdrawCollateral`, and `Liquidate` events from `Morpho Blue` contracts; `ReserveDataUpdated` events from `LendingPool` contracts; `BalanceTransfer`, `Mint`, and `Burn` events from `AToken` contracts; `DistributedBorrowerComp` and `DistributedSupplierComp` events from `Comptroller` contracts; `P2PTotalsUpdated` and `IndexesUpdated` events from `AaveV3Morpho` contracts; `P2PAmountsUpdated`, `Borrowed`, `Repaid`, `BorrowerPositionUpdated`, `Supplied`, `Withdrawn`, and `SupplierPositionUpdated` events from `EntryPositionsManager`, `ExitPositionsManager`, and `PositionsManager` contracts; and `P2PIndexesUpdated` events from `AaveInterestRatesManager` and `InterestRatesManager` contracts, covering Ethereum, Base, Arbitrum, Polygon, and 13 other chains
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Morpho Blue interest tracking

- **Purpose**: Capture interest accrued on Morpho Blue markets
- **Logic**: Accrued interest is extracted from `AccrueInterest` events emitted by `Morpho Blue` contracts. The interest amount is captured from the `interest` field. Specific markets are excluded from the calculation based on a denylist of exploited, misconfigured, or oracle-affected markets to prevent distortion of the metrics.
- **Key fields**: `interest` (accrued interest amount), `market_id` (market identifier)

### Component B: Morpho Optimizers Aave V3 interest calculation

- **Purpose**: Calculate interest accrued on Aave V3 markets integrated with Morpho Optimizers
- **Logic**: Deposit, withdrawal, and balance transfer events are parsed from `AToken` contracts to track scaled principal balances over time. Reserve updates are parsed from `LendingPool` contracts to track the liquidity index. Accrued interest is calculated by multiplying the previous scaled principal balance by the change in the liquidity index between updates.
- **Key fields**: `amount` (transaction amount), `index_value` (liquidity index), `balance_increase` (balance change)

### Component C: Morpho Optimizers P2P and pool interest calculation

- **Purpose**: Calculate interest accrued on peer-to-peer (P2P) and pool-based positions within Morpho Optimizers
- **Logic**: P2P and pool supply updates are parsed from `EntryPositionsManager`, `ExitPositionsManager`, and `PositionsManager` contracts to calculate weighted average outstanding supplies by day. Index updates are parsed from `AaveV3Morpho`, `AaveInterestRatesManager`, and `InterestRatesManager` contracts to determine daily changes in the pool supply and P2P borrow indexes. Daily interest is calculated by multiplying the outstanding supply balances by the corresponding index deltas.
- **Key fields**: `amount` (supply/loan balances), `pool_supply_index` (pool supply index), `p2p_borrow_index` (P2P borrow index)

### Component D: Morpho Optimizers Compound incentive tracking

- **Purpose**: Capture third-party COMP rewards distributed to Morpho Optimizer users
- **Logic**: COMP reward distributions are parsed from `DistributedBorrowerComp` and `DistributedSupplierComp` events emitted by Compound `Comptroller` contracts. The reward amounts are aggregated by day for borrowers and suppliers interacting with the Morpho Optimizer Compound integration.
- **Key fields**: `compDelta` (distributed COMP amount)

### Component E: Normalization and USD conversion

- **Purpose**: Normalize asset amounts and convert them to USD
- **Logic**: All extracted fee and interest components are normalized by their respective asset decimal precisions. The normalized values are multiplied by end-of-day asset prices obtained from price feeds.
- **Key fields**: `decimals` (asset decimal precision), `price_usd` (end-of-day asset price)

### Component F: Supply-side fee allocation

- **Purpose**: Determine the final supply-side fee metric
- **Logic**: Total fees are calculated as the sum of Morpho Blue interest, Morpho Optimizers Aave V3 interest, P2P interest, pool interest, and Compound incentives. Because the protocol does not currently retain any portion of the fees, 100% of the total fees are allocated to the supply side as supply-side fees.
- **Key fields**: `fees` (total fees), `fees_supply_side` (supply-side fees)

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

Portion of fees distributed to service providers or supply-side participants.

MorphoMORPHO

Supply-side fees

Supply-side fees

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