# Morpho Blue Total value locked Methodology

## 1. Overview

Total value locked (TVL) is calculated as the total USD value of assets deposited as collateral or supplied as loan assets within Morpho Blue markets, as well as idle assets held in associated vaults curated by partners such as Steakhouse Financial, Gauntlet, and Re7 Labs. This metric is utilized as a key indicator of the protocol's liquidity, capacity for debt generation, and overall adoption across supported networks. Supplied loan assets, deposited collateral assets, and unallocated idle vault assets are aggregated, and any outstanding bad debt is subtracted to calculate the final TVL. Exploited or distorted markets are excluded from the calculation to ensure data integrity.

## 2. Data sources

- **Blockchain events**: `CreateMarket`, `Supply`, `Withdraw`, `Borrow`, `Repay`, `SupplyCollateral`, `WithdrawCollateral`, `Liquidate`, and `AccrueInterest` events from `Morpho Blue` contracts, `CreateMetaMorpho` and `CreateVaultV2` events from vault factories, and ERC-20 `Transfer` events from vault contracts, covering Ethereum, Base, Arbitrum, Optimism, and 15 other chains
- **External data**: End-of-day price feeds for supplied, collateral, and vault assets, and asset metadata

## 3. Step-by-step calculation

### Component A: Market registration and asset mapping

- **Purpose**: Map Morpho Blue market identifiers to their respective loan and collateral assets.
- **Logic**: `CreateMarket` events from `Morpho Blue` contracts are parsed to extract the unique market identifier, the loan asset address, and the collateral asset address. Markets on Base utilizing cbBTC as the loan asset are filtered to include only whitelisted market identifiers.
- **Key fields**: `market_id`, `loan_token_address`, `collateral_token_address`

### Component B: Market state tracking

- **Purpose**: Calculate the running balances of supplied loan assets and deposited collateral assets for each active market.
- **Logic**: On-chain events from `Morpho Blue` contracts are processed chronologically to track asset balances. Supplied loan asset balances are incremented by `Supply` events and decremented by `Withdraw` events, while active debt is tracked via `Borrow` and `Repay` events. Deposited collateral asset balances are adjusted by `SupplyCollateral` and `WithdrawCollateral` events. Borrower debt, collateral, and supplied loan balances are reduced during `Liquidate` events by the repaid assets, seized assets, and realized bad debt assets, respectively. Both the supplied loan asset balance and the outstanding borrow balance are incremented by the accrued interest amount during `AccrueInterest` events.
- **Key fields**: `market_supply_asset_balance`, `market_collateral_asset_balance`, `market_borrow_asset_balance`

### Component C: Vault idle asset tracking

- **Purpose**: Determine the volume of unallocated assets held as idle balances within Vault V2 contracts.
- **Logic**: Idle assets (deposits not yet allocated to any Morpho Blue market) are tracked daily for Vault V2 contracts. On Monad, idle balances are reconstructed by calculating the cumulative sum of ERC-20 `Transfer` inflows and outflows for each vault address. On other supported chains, idle balances are retrieved directly from daily contract state snapshots.
- **Key fields**: `vault_address`, `vault_asset_address`, `idle_assets`

### Component D: Denylist filtering and normalization

- **Purpose**: Exclude distorted markets and normalize asset balances to USD.
- **Logic**: Market identifiers identified as exploited, containing bad debt, or subject to asset-inflation attacks are matched against a market denylist and excluded from the TVL calculation. The remaining daily balances of supplied loan assets, deposited collateral assets, and idle vault assets are normalized by their respective decimal precisions. These normalized balances are then multiplied by end-of-day asset prices to convert the values to USD.
- **Key fields**: `chain_id`, `market_id`, `price_usd`

### Component E: Final TVL aggregation

- **Purpose**: Aggregate the individual USD components into a single daily TVL metric.
- **Logic**: The USD values of supplied loan assets, deposited collateral assets, and idle vault assets are summed by day, chain, and product. Missing daily values are carried forward using the last known balance to maintain a continuous time series.
- **Key fields**: `timestamp`, `chain_id`, `product_id`, `tvl`

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

Total value locked (TVL)

Total value locked (TVL) — value deposited into the project's applications.

Total value locked

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

Total value locked

Total value locked

Chain breakdown