# Morpho Blue Active loans Methodology

## 1. Overview

Active loans is measured as the total USD value of assets lent out to borrowers on Morpho Blue. The portion of deposits that borrowers pay interest on is tracked, which correlates with the lending protocol's ability to generate revenue. Outstanding debt balances are monitored across individual lending markets to assess capital utilization. Only active, non-denylisted markets are included in the aggregation to ensure data integrity.

## 2. Data sources

- **Blockchain events**: `CreateMarket`, `Borrow`, `Repay`, `Liquidate`, and `AccrueInterest` events from `Morpho Blue` contracts, covering Ethereum, Base, Arbitrum, Optimism, and 15 other chains
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Morpho Blue market initialization and metadata mapping

- **Purpose**: Identify and map Morpho Blue markets to their respective loan and collateral assets.
- **Logic**: `CreateMarket` events from `Morpho Blue` contracts are parsed to extract the market ID, loan asset address, collateral asset address, and the loan-to-value parameter. Asset symbols are joined from asset metadata. To prevent data distortion, specific markets are filtered out: a denylist of markets affected by exploits, bad debt, or asset inflation attacks is applied, and cbBTC markets on Base are restricted to a predefined list of whitelisted market IDs.
- **Key fields**: `market_id`, `loan_token_address`, `collateral_token_address`, `lltv`

### Component B: Debt and interest accrual tracking

- **Purpose**: Calculate the net outstanding borrow balance for each market.
- **Logic**: Borrowing activity, repayments, liquidations, and interest accruals are tracked chronologically. Outstanding debt balances are increased by the borrowed asset amount upon the occurrence of `Borrow` events. Outstanding debt balances are decreased by the repaid asset amount upon the occurrence of `Repay` events. Debt balances are reduced by the sum of repaid assets and realized bad debt assets during `Liquidate` events. Outstanding debt balances are increased by the accrued interest amount during `AccrueInterest` events. A running cumulative sum of these asset changes is calculated to determine the active loan balance for each market at any given block.
- **Key fields**: `assets`, `repaid_assets`, `bad_debt_assets`, `interest`

### Component C: Decimal normalization and USD conversion

- **Purpose**: Normalize asset balances and convert them to USD.
- **Logic**: The daily active loan balance for each market is extracted from the latest state of each day. Raw asset amounts are normalized by dividing by the asset's decimal precision. Normalized balances are then multiplied by end-of-day asset prices to convert the active loans into USD.
- **Key fields**: `active_loans`, `decimals`, `price_usd`

### Component D: Final aggregation and forward-filling

- **Purpose**: Aggregate active loans across all markets and ensure daily continuity.
- **Logic**: Active loan values in USD are summed by day, chain, and product. To handle days with no transaction activity, a forward-fill strategy is applied to carry the last known active loan balance forward. Any remaining gaps are filled with zeros to produce a continuous daily time series.
- **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.

Active loans

Lending

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.

Morpho Blue

Active loans

Active loans

Chain breakdown