# Morpho Optimizers Active loans Methodology

## 1. Overview

Active loans is a metric by which the value of user deposits lent out to borrowers is measured. For Morpho Optimizers, the outstanding debt matched peer-to-peer (P2P) or placed directly in underlying liquidity pools (Aave V2, Aave V3, and Compound) is tracked. The portion of deposits on which interest must be paid by borrowers is represented by this metric. A strong correlation is typically observed between this metric and the protocol's ability to generate revenue.

## 2. Data sources

- **Blockchain events**: `Mint` and `Burn` events from `VToken` contracts; `ReserveDataUpdated` events from `LendingPool` contracts; `P2PTotalsUpdated` events from `AaveV3Morpho` contracts; `P2PAmountsUpdated` events from `EntryPositionsManager` and `PositionsManager` contracts; `Borrowed`, `Repaid`, and `BorrowerPositionUpdated` events from `PositionsManager` and `EntryPositionsManager` contracts; and `IndexesUpdated` and `P2PIndexesUpdated` events from `AaveV3Morpho`, `AaveInterestRatesManager`, and `InterestRatesManager` contracts, covering Ethereum
- **External data**: End-of-day price feeds for borrowed assets, and asset metadata

## 3. Step-by-step calculation

### Component A: Aave V3 Optimizer active loans

- **Purpose**: To calculate the active loans placed directly in the underlying Aave V3 pool.
- **Logic**: `Mint` and `Burn` events from `VToken` contracts are parsed to track scaled principal borrow and repayment amounts for the Morpho Optimizers account. A running scaled principal balance is calculated over time. This balance is multiplied by the variable borrow index, which is extracted from `ReserveDataUpdated` events from `LendingPool` contracts, to determine the active loan balance.
- **Key fields**: `amount`, `balance_increase`, `index_value`

### Component B: Peer-to-peer (P2P) active loans

- **Purpose**: To calculate outstanding loans matched peer-to-peer across Aave V2, Aave V3, and Compound.
- **Logic**: `P2PTotalsUpdated` events from `AaveV3Morpho` contracts and `P2PAmountsUpdated` events from `EntryPositionsManager` and `PositionsManager` contracts are parsed to extract P2P borrow amounts. These amounts are multiplied by the P2P borrow index, which is updated via `IndexesUpdated` and `P2PIndexesUpdated` events from `AaveV3Morpho`, `AaveInterestRatesManager`, and `InterestRatesManager` contracts. A daily weighted average of these balances is calculated based on block-by-block durations.
- **Key fields**: `amount`, `p2p_borrow_index`

### Component C: Underlying pool active loans

- **Purpose**: To calculate outstanding loans placed in underlying Aave V2 and Compound pools.
- **Logic**: `Borrowed`, `Repaid`, and `BorrowerPositionUpdated` events from `PositionsManager` and `EntryPositionsManager` contracts are parsed to track on-pool borrow balances. These balances are multiplied by the pool borrow index, which is updated via `IndexesUpdated` and `P2PIndexesUpdated` events from `AaveV3Morpho`, `AaveInterestRatesManager`, and `InterestRatesManager` contracts. A daily weighted average of these balances is calculated based on block-by-block durations.
- **Key fields**: `amount`, `pool_borrow_index`

### Component D: Decimal normalization and USD conversion

- **Purpose**: To ensure asset balances are normalized and converted to USD.
- **Logic**: Active loan balances from all components are normalized by decimal precision using asset metadata. The normalized balances are multiplied by end-of-day asset prices to convert the values to USD.
- **Key fields**: `active_loans`, `price_usd`

### Component E: Daily aggregation and forward-filling

- **Purpose**: To ensure active loans are aggregated and daily continuity is maintained.
- **Logic**: The USD-denominated active loans from Aave V3, P2P, and underlying pool components are aggregated by day and asset. Missing daily data points are forward-filled using the last known active loan balance to ensure a continuous daily time series.
- **Key fields**: `active_loans`, `timestamp`

*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 Optimizers

Active loans

Active loans

Chain breakdown