# Morpho Midnight Active loans Methodology

## 1. Overview

The Active loans metric is defined as the total value of user deposits that are lent out to borrowers. The portion of deposits on which interest is paid by borrowers is tracked, as a correlation is typically observed with the revenue-generating ability of Morpho Midnight. For Morpho Midnight, outstanding debt balances are monitored across all active markets to determine the total active loans.

## 2. Data sources

- **Blockchain events**: `MarketCreated`, `Take`, `Repay`, and `Liquidate` events from `Midnight` contracts, covering Ethereum, Base, Arc, Robinhood Chain, and Tempo
- **External data**: End-of-day price feeds and asset metadata

## 3. Step-by-step calculation

### Component A: Market identification and metadata mapping

- **Purpose**: Identify active Morpho Midnight markets and map them to their respective loan assets.
- **Logic**: `MarketCreated` events from `Midnight` contracts are parsed across all supported chains. The unique market identifier, loan asset address, and maturity are extracted. Asset metadata is joined to retrieve the symbol and decimal precision of the loan asset.
- **Key fields**: `market_id`, `loan_token` (loan asset address), `maturity`

### Component B: Debt delta tracking

- **Purpose**: Capture all changes in outstanding debt for each market.
- **Logic**: Debt-modifying events are parsed from `Midnight` contracts. Net debt increases are extracted from the `total_units_delta` field of `Take` events. Debt reductions are extracted from the `units` field of `Repay` events and the combined `repaid_units` and `bad_debt` fields of `Liquidate` events. These values are signed appropriately, with increases treated as positive deltas and reductions as negative deltas.
- **Key fields**: `total_units_delta` from `Take` events, `units` from `Repay` events, `repaid_units` and `bad_debt` from `Liquidate` events

### Component C: Daily cumulative balance calculation

- **Purpose**: Calculate the daily outstanding borrowed balance for each market.
- **Logic**: The signed debt deltas are aggregated by day, chain, market, and loan asset. A cumulative sum of these daily deltas is calculated over time to determine the running outstanding borrowed balance for each market.
- **Key fields**: `timestamp`, `chain_id`, `market_id`, `token_address`, `balance` (active loans in native units)

### Component D: USD conversion and aggregation

- **Purpose**: Normalize active loan balances to USD and aggregate them.
- **Logic**: The raw cumulative borrowed balances are normalized by the decimal precision of the respective loan assets. The normalized balances are then multiplied by end-of-day asset prices to convert the values to USD. The final active loan values are aggregated by day, chain, and product.
- **Key fields**: `timestamp`, `chain_id`, `product_id`, `active_loans` (USD value)

*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 Midnight

Active loans

Active loans

Chain breakdown