#morpho $MORPHO Morpho is a decentralized (non-custodial) lending protocol, primarily operating on Ethereum and other EVM

(Ethereum Virtual Machine) compatible chains.

· It matches borrowers and lenders through a peer-to-peer (P2P) mechanism, thereby improving capital efficiency.

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· At the same time, if P2P cannot match, Morpho will route funds to the underlying liquidity pools (such as Aave/Compound) to ensure liquidity.

Core and Structure

· Morpho Markets: Each market is an isolated lending market that only contains one type of collateral asset and one type of loan asset. Market creation is permissionless (no central permission required), and risk parameters (such as liquidation ratio LLTV, interest rate model, etc.) are determined at creation and immutable.

· Interest Rate Model (IRM): Morpho uses an Adaptive Rate Model (AdaptiveCurve IRM), dynamically adjusting interest rates based on market utilization (ratio of borrowed assets to deposited assets).

· Liquidation Mechanism: When the value of a borrower's collateral assets decreases, causing the loan-to-value ratio to exceed the market-set LLTV (Liquidation Loan-To-Value), it may be liquidated.

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· Vaults: In addition to directly participating in the market, users can also deposit assets into Vaults managed by curators. Vaults will allocate funds across multiple orpho markets based on strategies to optimize returns and diversify risks.