What is Morpho Labs? Morpho Labs is a new generation P2P Lending platform built and developed on Ethereum. Morpho Labs promises to improve existing problems on Lending Protocol platforms that use the conventional Pool model or outdated P2P Lending platforms.
So what is so interesting about Morpho Labs that makes so many famous investment funds bet on it? Let’s find out with Weakhand in this article.
Morpho Labs Overview
What is Morpho Labs?
The problem arises
For Lending Protocols on the market, if you look at the profits earned from lenders and the interest rates paid from borrowers on the two largest Lending Protocol platforms currently, AAVE and Compound, there is definitely a huge difference. big. The reason for this difference mostly comes from the pool operating model and lack of liquidity.
With the pool model, many lenders must share the interest generated by a small number of lenders and borrowers. This results in lenders making less money while borrowers have to pay more to compensate for low pool liquidity.
For P2P Lending platforms, having to set up each parameter on interest rate, desired collateral, payment schedule, liquidation method,… causes P2P Lending platforms to encounter serious problems in matching liquidity between borrowers and lenders because there are too many conditions.
The solution given is Morpho Optimize
Morpho offers a solution that is a perfect combination of the Liquidity Pool and P2P models. Lenders and borrowers will put their assets into Morpho Labs’ pool.
Lenders will be arranged from small to large and vice versa, borrowers will be arranged from large to small. The borrower’s largest loan will absorb all of the lender’s liquidity, then move to the 2nd, 3rd borrower, etc. So how will the interest rate be calculated?
The interest rate will be calculated by the Morpho platform as an average between Supply APY and Borrow APY. And Morpho will take these two figures from the two largest Lending Protocol platforms on the market, AAVE and Compound. That’s why Morpho also offers two large pools: Morpho – Compound and Morpho – AAVE.
Currently the project has been audited by many parties such as ChainSecurity, Spearbit, Trail of Bits, Solidified, Certora,…
Overview of Morpho Blue & MetaMorpho
Morpho Optimize itself also has some problems such as:
- Depends on liquidity and security levels from platforms such as AAVE V2, AAVE V3 and Compound V2.
- Having too many calls when a P2P Lending Order takes place also generates a lot of transaction fees.
- Morpho Optimize itself will also be difficult to develop strongly in the long term because of its inherent limitations.
Therefore, by August 2023, the development team of Morpho Labs has officially phased out Morpho Optimize and started building Morpho Blue, MetaMorpho. Morpho Blue is a Decentralized Lending Protocol with some outstanding features as follows:
- Allows users to create markets with customization of any collateral, any loan asset, LTV (mortgage) ratio and Oracle. These markets will be separate and unrelated to each other similar to current Isolated Pools.
- Morpho Blue allows other platforms to be built on top of it, thereby creating a future Morpho ecosystem.
- Morpho Blue is designed only once and cannot be changed forever. That’s why it is designed in the simplest way to last the test of time.
- Morpho Blue supports Flash Loans completely free of charge
With anyone able to create a pool, the marketplace on Morpho Blue makes the Morpho ecosystem begin to expand. And the first product is MetaMorpho, users just need to put money into the platform’s Vault and then the platform will use the above assets based on different lending strategies on Morpho Blue to make profits.
With this build design, Morpho becomes extremely flexible and can reach all different customer profiles in the market such as single users, liquidity providers, Protocols, DAOs, centralized organizations central,..
Core Team
Merlin Egalite: Co Founder
Merlin has many years of programming in large companies and episodes such as Junior CentraleSupélecJunior, Finalist. By mid-2020, Merlin began participating in the crypto market with the Blockpulse project. After participating in many crypto projects such as KlerosKleros, baby vc and The Commons StackThe, Merlin officially built Morpho Labs.
Paul Frambot: Co Founder & CEO
There is not too much information about Paul, it is likely that Paul is quite young. However, it seems that Paul has joined the Ethereum community in France since December 2019.
Investor
- July 12, 2022: Morpho Labs officially successfully raised a large amount of money for a regular Lending & Borrowing platform of $18M in a Seed round led by Variant, Nascent and A16Z in addition to Angel DAO, Coinbase Ventures, Mechanism , Stake Capital and many Angel Investors such as Brianna Montgomery, Joey Santoro from Fei Protocol, Aseem Sood from Uniswap, Fernando Martinelli from Balancer or Nicholas Tong from Perpetual.
Tokenomics
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Exchanges
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Morpho Labs’ Information Channel
- Website: https://www.morpho.xyz/
- Twitter: @MorphoLabs
- Medium:
Summary
Morpho Labs is bringing a new breeze to the Lending & Borrowing market and the platform’s TVL is also growing very well. In my opinion, Morpho deserves to be a project on everyone’s watchlist in the near future.