1) Executive summary

Morpho $MORPHO is decentralized lending infrastructure that enables permissionless market creation, allowing anyone to deploy isolated lending markets with customizable risk parameters. The project consists of two core products: Morpho Vaults (yield-generating vaults for depositors) and Morpho Markets (isolated lending pools for borrowers). Unlike traditional lending projects that manage assets directly, Morpho serves as the underlying rails for curators (asset managers, DAOs, institutions) who build and manage vaults on top of the infrastructure. Since launching in 2022, Morpho has iterated from an optimization layer on top of Aave and Compound toward standalone lending infrastructure with its own modular architecture.

In Q3 2025, Morpho grew across key metrics. TVL, active loans, fees, and MAU all increased significantly QoQ, with fee growth outpacing all other metrics. Ethereum captured the majority of TVL, active loans, and fees, while Base was a notable contributor. World Chain led user activity at 72.25% of monthly active users.

🔑 Key metrics (Q3 2025)

  • Total value locked: $9.75B (+81.82% QoQ)

  • Active loans: $3.56B (+74.02% QoQ)

  • Fees: $57.62M (+137.19% QoQ)

  • Monthly active users: 223K (+121.89% QoQ)

2) Total value locked

Total value locked (TVL) measures the total USD value of collateral deposited into Morpho and outstanding loans. Q3 TVL averaged $9.75B, up from $5.36B in Q2, representing an 81.82% increase quarter-over-quarter. Ethereum accounted for the majority of deposits at $6.25B (64.10% of Q3 total), followed by Base at $2.47B (25.32%). The remaining chains (HyperEVM, Polygon, Unichain, World Chain, Arbitrum One, OP Mainnet, Celo, and Scroll) collectively contributed $1.03B (10.56%).

👥 Morpho team commentary

"Morpho's TVL has grown significantly in Q3 2025, reflecting the fact that the universal lending network Morpho is building is scaling. Morpho continues to execute the DeFi Mullet strategy, with growth on Base coming in proportion to the growth of Coinbase's bitcoin-backed loans, DeFi lending, and later in the year, ETH-backed loan products. Another main growth lever is HyperEVM, where third-party teams such as Felix and HyperBeat have been driving growth starting from Q2. HyperEVM has quickly grown into the third largest instance of Morpho. Arbitrum has also seen major growth as the DRIP campaign directed growth incentives for stablecoins towards Morpho."

3) Active loans

Active loans measures the total USD value of outstanding borrows across all Morpho lending markets. Q3 active loans averaged $3.56B, up from $2.05B in Q2, representing a 74.02% increase quarter-over-quarter. Ethereum accounted for the majority of borrowing at $2.41B (67.54% of Q3 total), followed by Base at $824.97M (23.15%). The remaining chains (HyperEVM, Unichain, Polygon, Celo, Arbitrum One, World Chain, Sonic, and OP Mainnet) collectively contributed $379.53M (10.65%).

👥 Morpho team commentary

"Active loans continue to scale on Morpho, nearly 2x in Q3 compared with Q2. Continued growth of BTC and ETH-backed loans on Base, integrated with Coinbase, alongside HyperEVM's sustained momentum and Arbitrum One growth coinciding with the DRIP campaign have driven this increase. On Base, much of the loan demand comes from Coinbase users taking out crypto-backed loans for expenses such as buying a house, paying for a car, or refinancing existing debt. On HyperEVM, loan volume is largely driven by trading demand. On aggregate, there is growing demand for loans beyond traditional DeFi use cases like looping."

4) Fees

Fees measure the total USD value of fees paid by users across all of Morpho's lending markets. Q3 fees totaled $57.62M, up from $24.29M in Q2, representing a 137.19% increase quarter-over-quarter. Ethereum generated $37.93M (65.83% of Q3 total), followed by Base at $13.08M (22.70%). The remaining chains (HyperEVM, Polygon, Unichain, Arbitrum One, World Chain, OP Mainnet, Celo, and Sonic) collectively contributed $6.62M (11.47%).

👥 Morpho team commentary

"Interest generated on Morpho has grown from roughly $50M in Q1 2025 to close to $150M YTD in Q3. Although there were some dips in market conditions, the overall trend has pointed up and to the right. Integrations with products such as Coinbase have brought a substantial increase in sustainable borrowing demand, resulting in higher interest generation.

Curators are compensated via management fees and/or performance fees, with each curator setting their own structure. Some opt for relatively low fees while others charge more based on track record or differentiated strategies. Curators can also partner with distributors and enter into revenue-sharing agreements. Because operational costs of running vaults are meaningfully lower than traditional fund management, curators can often charge lower fees while maintaining attractive margins.

Morpho does not currently monetize at the protocol level. All resources are devoted towards growth to reach the ambition of powering lending and borrowing for the entire financial industry."

5) Monthly active users

Monthly active users (MAU) measures the number of unique wallet addresses that have interacted with Morpho over a rolling 30 day period. Q3 MAU averaged 223K, up from 100.50K in Q2, representing a 121.89% increase quarter-over-quarter. World Chain led user activity with 164K users (72.25% of Q3 total), followed by Base at 36.30K (15.99%) and HyperEVM at 12.40K (5.46%). Ethereum contributed 10.60K users (4.67%). The remaining chains (Polygon, Unichain, Arbitrum One, OP Mainnet, Scroll, and Celo) collectively contributed 3.70K users (1.63%).

👥 Morpho team commentary

"MAU continues to grow on Morpho, with the biggest growth coming from World Chain and Base. Morpho is the infrastructure powering World DeFi. There is a Morpho miniapp in the World App where users can earn and borrow easily within a few taps. Morpho on Base powers Coinbase's crypto-backed loans and DeFi lending products, with growth there reflecting organic product adoption. L2s are part of the Ethereum ecosystem, and Morpho's strategy has always been to lean into distribution to reach as many users as possible, whether through DeFi Mullet integrations or via L2s."

6) Outlook

👥 Morpho team commentary

"Morpho continues to build the best universal lending network for enterprises. Fintechs, banks, and institutions can all connect to Morpho to provide the best possible products to their users. The team is working on integrations with more enterprises to build DeFi Mullet-style products for both consumers and institutions. Vaults are the funds of tomorrow: some familiar names in the financial industry will become curators."

7) Definitions

Products:

  • Morpho Vaults (Earn): yield-generating vaults for depositors, allowing users to deposit assets into curated lending strategies built on top of Morpho Markets.

  • Morpho Markets (Borrow): isolated lending pools for borrowers, allowing users to supply collateral and borrow assets directly from permissionless markets with customizable risk parameters.

Metrics:

  • Total value locked: measures the total USD value of collateral deposited into Morpho and outstanding loans.

  • Active loans: measures the total USD value of outstanding borrows across all Morpho lending markets.

  • Fees: measures the total USD value of fees paid by users across all of Morpho's lending markets.

  • Monthly active users: measures the number of unique wallet addresses that have interacted with Morpho over a rolling 30 day period.

8) About this report

This report is published quarterly and produced leveraging Token Terminal’s end-to-end onchain data infrastructure. All metrics are sourced directly from blockchain data. Charts and datasets referenced in this report can be viewed on the corresponding Morpho Q3 2025 Report dashboard on Token Terminal.