# Morpho Blue Supply-side fees Methodology

## 1. Overview

The share of interest fees generated by Morpho Blue that is distributed to liquidity providers (depositors) is measured by supply-side fees. Total interest accrued by borrowers that is paid out to lenders as compensation for supplying assets to the platform is represented by this metric. Because the protocol fee switch is not active, 100% of the interest paid by borrowers is allocated directly to the supply side. This metric is utilized to evaluate the yield-generating capacity and supply-side incentives of the Morpho Blue protocol.

## 2. Data sources

- **Blockchain events**: `AccrueInterest` and `CreateMarket` events from `Morpho Blue` contracts, covering Ethereum, Base, Arbitrum, Optimism, and 13 other chains
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Interest accrual extraction

- **Purpose**: Raw interest accrued from Morpho Blue markets is extracted.
- **Logic**: `AccrueInterest` events are parsed from `Morpho Blue` contracts. The `interest` field is extracted to represent the interest accrued in the loan asset. Market identifiers are mapped to their respective loan and collateral assets using `CreateMarket` events from `Morpho Blue` contracts.
- **Key fields**: `interest` (interest accrued), `id` (market identifier), `loanToken` (loan asset address)

### Component B: Market filtering and denylisting

- **Purpose**: Exploited, misconfigured, or distorted markets are excluded to ensure data integrity.
- **Logic**: Market status changes are joined with interest and market denylists. Markets with known oracle issues (such as specific cbBTC, PAXG, and deUSD markets) or those distorted by exploits and bad debt are filtered out.
- **Key fields**: `market_id` (market identifier), `chain_id` (chain identifier)

### Component C: Normalization and USD conversion

- **Purpose**: Interest amounts are normalized by decimal precision and converted to USD.
- **Logic**: Raw interest amounts are normalized by the decimal precision of the underlying loan asset. Normalized amounts are multiplied by end-of-day asset prices to determine the USD value.
- **Key fields**: `decimals` (asset precision), `price_usd` (asset price)

### Component D: Supply-side fee allocation

- **Purpose**: The portion of fees allocated to the supply side is determined.
- **Logic**: Because the protocol fee switch is not active, 100% of the accrued interest is allocated to the supply side (depositors). Supply-side fees are aggregated daily by chain and product.
- **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.

Supply-side fees

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

Supply-side fees

Supply-side fees

Chain breakdown