# Morpho Optimizers Total value locked Methodology

## 1. Overview

Total value locked (TVL) for Morpho Optimizers is calculated as the cumulative value of user deposits and active peer-to-peer (P2P) loans matched by the optimization engine. The total capital allocated to the protocol's yield optimization strategies across underlying lending pools, specifically Aave V2, Aave V3, and Compound, is represented by this metric. TVL is utilized as a primary indicator of protocol liquidity and capital efficiency.

## 2. Data sources

- **Blockchain events**: `Mint`, `Burn`, and `BalanceTransfer` events from `AToken` contracts; `ReserveDataUpdated` events from `LendingPool` contracts; `PostTotalShares` events from `Oracle` contracts; `TokenRebased` events from `stETH` contracts; `IndexesUpdated` and `P2PIndexesUpdated` events from `AaveV3Morpho`, `AaveInterestRatesManager`, and `InterestRatesManager` contracts; `P2PTotalsUpdated` and `P2PAmountsUpdated` events from `AaveV3Morpho`, `EntryPositionsManager`, and `PositionsManager` contracts; `Borrowed`, `Repaid`, `BorrowerPositionUpdated`, `Supplied`, `Withdrawn`, and `SupplierPositionUpdated` events from `PositionsManager`, `EntryPositionsManager`, and `ExitPositionsManager` contracts; and ERC-20 and native asset transfers, covering Ethereum
- **External data**: End-of-day price feeds for deposited and borrowed assets, and asset metadata

## 3. Step-by-step calculation

### Component A: Morpho Optimizers - Aave V2 and Aave V3 deposits

- **Purpose**: The calculation of active deposits in the Aave V2 and Aave V3 optimizer pools.
- **Logic**: `Mint`, `Burn`, and `BalanceTransfer` events from `AToken` contracts are parsed to track the scaled principal balance of the Morpho Optimizers accounts. For stETH deposits, Lido rebases are tracked using `PostTotalShares` and `TokenRebased` events to adjust the share balance. The scaled principal balance is multiplied by the liquidity index (extracted from `ReserveDataUpdated` events) to calculate the active deposits in native asset units.
- **Key fields**: `amount` (deposit/withdrawal quantities), `index_value` (liquidity index), `underlying_token_address` (asset identification)

### Component B: Morpho Optimizers - Compound deposits

- **Purpose**: The calculation of active deposits in the Compound optimizer pool.
- **Logic**: ERC-20 and native asset transfers to the Morpho Compound account (`0x8888882f8f843896699869179fb6e4f7e3b58888`) are aggregated daily to determine the cToken balances. These balances are mapped to their underlying assets using Compound market metadata. The underlying active deposits are calculated by dividing the cToken balance by the exchange rate, which is derived from the end-of-day prices of the underlying asset and the cToken.
- **Key fields**: `amount` (transfer quantities), `token_address` (asset identification)

### Component C: Morpho Optimizers - Active loans

- **Purpose**: The calculation of outstanding active loans matched by the optimizer.
- **Logic**: Peer-to-peer (P2P) loan updates are tracked using `P2PTotalsUpdated` and `P2PAmountsUpdated` events, while pool-allocated loans are tracked using `Borrowed`, `Repaid`, and `BorrowerPositionUpdated` events. The raw loan amounts are adjusted by multiplying them by the P2P borrow index or pool borrow index (derived from `IndexesUpdated` and `P2PIndexesUpdated` events). Daily weighted average balances are calculated using block-by-block weights to determine the final active loans.
- **Key fields**: `amount` (loan quantities), `p2p_borrow_index` (P2P borrow index), `pool_borrow_index` (pool borrow index), `token_address` (asset identification)

### Component D: USD conversion and final aggregation

- **Purpose**: The conversion of asset balances to USD and final aggregation to calculate total TVL.
- **Logic**: The active deposits and active loans are summed by asset and day. All asset amounts are normalized by decimal precision and multiplied by end-of-day asset prices to convert them to USD. The final TVL is calculated as the sum of USD-denominated active deposits and active loans across all supported markets.
- **Key fields**: `tvl` (total value locked), `price_usd` (asset price)

*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 Optimizers

Total value locked

Total value locked

Chain breakdown