# Morpho Midnight Total value locked Methodology

## 1. Overview

Total value locked (TVL) is calculated as the total value of assets deposited as collateral, supplied as loan liquidity, committed as open offers, or outstanding as active loans within Morpho Midnight. This metric is utilized as a primary indicator of the protocol's liquidity, capital efficiency, and overall lending activity. Collateral deposits, loan supplies, active borrows, and open offers are tracked across individual markets to provide a comprehensive view of the protocol's financial state. These balances are converted to USD using end-of-day price feeds to enable cross-asset aggregation.

## 2. Data sources

- **Blockchain events**: `MarketCreated`, `SupplyCollateral`, `WithdrawCollateral`, `Liquidate`, `Repay`, `Withdraw`, `ClaimContinuousFee`, and `Take` events from `Midnight` contracts, covering Ethereum, Base, Arc, Robinhood Chain, and Tempo
- **Off-chain data**: Committed lend liquidity (open offers) captured from off-chain signed message databases
- **External data**: End-of-day price feeds and asset metadata for deposited and borrowed assets

## 3. Step-by-step calculation

### Component A: Market identification

- **Purpose**: To identify active Morpho Midnight markets and their associated loan assets.
- **Logic**: `MarketCreated` events from `Midnight` contracts are parsed to map each market identifier to its corresponding loan asset address and maturity timestamp.
- **Key fields**: `market_id`, `loan_asset_address`

### Component B: Collateral balance tracking

- **Purpose**: To calculate the cumulative collateral assets deposited by borrowers.
- **Logic**: `SupplyCollateral`, `WithdrawCollateral`, and `Liquidate` events from `Midnight` contracts are parsed. The collateral balance is increased by deposits, and is decreased by withdrawals and seized assets from liquidations. The net daily changes are summed cumulatively to determine the end-of-day collateral balance for each asset.
- **Key fields**: `assets`, `seized_assets`

### Component C: Loan supply balance tracking

- **Purpose**: To calculate the cumulative loan liquidity supplied by lenders.
- **Logic**: `Repay`, `Withdraw`, `ClaimContinuousFee`, and `Liquidate` events from `Midnight` contracts are parsed. The loan supply balance is increased by repayments and repaid units from liquidations, and is decreased by lender withdrawals and claimed continuous fees. The net daily changes are summed cumulatively to determine the end-of-day loan supply balance for each asset.
- **Key fields**: `units`, `repaid_units`, `amount`

### Component D: Active loans tracking

- **Purpose**: To calculate the outstanding debt borrowed from the protocol.
- **Logic**: `Take`, `Repay`, and `Liquidate` events from `Midnight` contracts are parsed. The outstanding debt is increased by matches (takes) representing the net change in aggregate debt, and is decreased by repayments, repaid units, and bad debt from liquidations. The net daily changes are summed cumulatively to determine the end-of-day active loans balance for each asset.
- **Key fields**: `total_units_delta`, `units`, `repaid_units`, `bad_debt`

### Component E: Open offers tracking

- **Purpose**: To calculate the committed lend liquidity that has not yet been matched.
- **Logic**: Off-chain committed lend liquidity snapshots are aggregated daily. The latest snapshot within each day is selected, and the committed assets are summed by asset to determine the daily open offers balance.
- **Key fields**: `committed_assets`, `snapshot_at`

### Component F: Normalization and USD conversion

- **Purpose**: To normalize asset balances and convert them to USD.
- **Logic**: All cumulative balances (collateral, loan supply, active loans, and open offers) are normalized by their respective asset decimal precisions. The normalized balances are then multiplied by end-of-day asset prices to calculate the USD value of each component.
- **Key fields**: `price_usd`, `decimals`

### Component G: Final TVL aggregation

- **Purpose**: To aggregate all components into the final TVL metric.
- **Logic**: The USD values of collateral, loan supply, active loans, and open offers are aggregated daily. Forward-filling is applied to ensure continuous daily data, and any missing days are zero-filled.
- **Key fields**: `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 Midnight

Total value locked

Total value locked

Chain breakdown