# Morpho Blue Vault deposits Methodology

## 1. Overview

The total value of assets deposited into the vaults of Morpho Blue is measured by Vault deposits. Liquidity supplied by users to automated, curated lending strategies is represented by this metric. The overall growth, adoption, and liquidity depth of the Morpho Blue vault ecosystem are assessed through the aggregation of these balances. Nested vault structures are identified and excluded to prevent the double-counting of deposited assets.

## 2. Data sources

- **Blockchain events**: ERC-20 `Transfer` events for vault shares, `CreateMetaMorpho` and `CreateVaultV2` events from factory contracts, parameter change events (including `SetCurator`, `SetSymbol`, `SetName`, `SetFee`, `SetPerformanceFee`, and `SetManagementFee`) from vault contracts, `CreateMorphoVaultV1Adapter` events from adapter factory contracts, and on-chain state reads of total assets and lost assets from vault contracts, covering Ethereum, Arbitrum, Base, Optimism, and 14 other chains
- **External data**: End-of-day price feeds and asset metadata for underlying assets

## 3. Step-by-step calculation

### Component A: Vault identification and metadata tracking

- **Purpose**: Identify active Morpho Blue vaults, their underlying assets, and curators
- **Logic**: Vault creations are tracked using `CreateMetaMorpho` and `CreateVaultV2` events. Subsequent changes to vault parameters are monitored via `SetCurator`, `SetSymbol`, `SetName`, `SetFee`, `SetPerformanceFee`, and `SetManagementFee` events. If no curator is explicitly set, the owner address is designated as the curator. Curator addresses are mapped to canonical curator names using a predefined mapping.
- **Key fields**: `vault_address`, `underlying_token_address`, `curator_address`, `owner_address`

### Component B: Share flow and balance tracking

- **Purpose**: Calculate the daily share balances for each user across all vaults
- **Logic**: Net daily flows of vault shares are aggregated from ERC-20 `Transfer` events. User balances are calculated by cumulatively summing these daily net flows over time. To prevent double-counting of assets, flows associated with nested vaults are identified using `CreateMorphoVaultV1Adapter` events and excluded from the balance calculations. Share balances are forward-filled to ensure continuity across all days.
- **Key fields**: `timestamp`, `vault_address`, `user_address`, `amount`, `balance`

### Component C: Deposit index calculation

- **Purpose**: Determine the conversion rate from vault shares to underlying assets
- **Logic**: On-chain state reads of total assets are captured daily for each vault. For MetaMorpho V1.1 vaults, phantom-loss cushions are adjusted by subtracting lost assets from the total assets to obtain net total assets. The deposit index is calculated as the ratio of net total assets (plus one unit of precision) to the total supply of vault shares (plus one unit of precision), with both components normalized by the decimal precision of the underlying asset.
- **Key fields**: `timestamp`, `vault_address`, `total_assets`, `lost_assets`, `total_supply`, `deposit_index`

### Component D: Underlying asset deposit calculation

- **Purpose**: Convert share balances to underlying asset quantities
- **Logic**: Total vault shares are aggregated by vault and day. These share balances are multiplied by the daily deposit index to calculate the total deposits in raw units of the underlying asset. Daily changes in deposits are calculated by taking the difference between the current and previous day's deposit balances.
- **Key fields**: `timestamp`, `vault_address`, `total_shares`, `deposit_index`, `vault_deposits`, `delta_vault_deposits`

### Component E: USD conversion and final aggregation

- **Purpose**: Normalize deposit values to USD and aggregate at the protocol level
- **Logic**: Underlying asset deposit balances are normalized by their respective decimal precisions. These normalized balances are multiplied by end-of-day asset prices to convert the values to USD. The daily USD values are aggregated by chain and product to produce the final daily vault deposits metric. Missing days are filled with the last known value, and chain availability filters are applied.
- **Key fields**: `timestamp`, `chain_id`, `product_id`, `token_address`, `vault_deposits`

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

Total amount of deposits held in protocol vaults.

Vault deposits

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

Vault deposits

Vault deposits

Chain breakdown