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Take the example of Morpho. The Morpho protocol is a collection of Morpho Markets. A Morpho V1 Market is a primitive lending pool that pairs one collateral asset with one loan asset. Borrowers deposit in collateral assets, and may in turn borrow loan assets. Each market is isolated (meaning risks are contained within each individual market), immutable (cannot be changed after deployment), and will persist indefinitely - as long as the blockchain it deployed on is live. This design ensures predictable behavior and eliminates systematic risk for lenders and borrowers. Creating a Morpho Market is permissionless. To summarise, the key features of Morpho Markets are:
  • Simple structure: One collateral asset, one loan asset per market.
  • Immutable parameters: Once created, the rules never change.
  • Isolated risk: Each market operates independently.
  • Permission-less: New market doesn’t require any kind of vote or consent from the Morpho organisation to be created.
  • Transparent rules: Clear conditions for lending and borrowing.
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