🦋 Morpho is building a peer-to-peer layer on top of leading DeFi lending protocols like Compound and Aave. This contrasts the pool-based models of these platforms that match borrowers and lenders through shared liquidity pools. While convenient, these pools involve tradeoffs like rate spreads that reduce lender yields.
🧾 Instead, Morpho enables direct peer-to-peer lending between suppliers and borrowers. This maximizes interest rates for lenders while reducing costs for borrowers. By facilitating one-to-one capital matching rather than pooled funds, Morpho unlocks a more efficient model for connecting DeFi market participants.
🏛️ Overall, Morpho tackles inefficiencies in current pooling mechanisms by revamping lending dynamics. The project has secured 37,5M$ in investor backing from a16z, Variant, Coinbase Ventures, and others. Morpho built a token distribution model, which will reward early adopters and project contributors. As DeFi matures, purpose-built protocols like Morpho help further advance core primitives.
Step-by-step guide
❗️Before starting, please ensure that you have a wallet and ETH on it. If don’t, install a Metamask wallet and deposit ETH.
1)🪼 Go to Morpho Blue, and supply WETH or USDC. You can see your MORPHO rewards while using their product.
❗️Additional tokens are distributed yearly for each 1000$ worth of position, so to gain the listed amount of tokens you need to create at least 1000$ position.
2) Borrow from given pools40–60% of your supply position to maintain higher capital efficiency.
3)⚖️ Go to Morpho optimizer and choose AaveV2 or AaveV3-ETH pool, because they grant additional MORPHO rewards.
Overall, you can increase your yield and receive additional token rewards by using Morpho products. We would recommend the minimum investment of 0.7 ETH.