Morpho, a lending and borrowing protocol in the world of decentralized finance (DeFi) on Ethereum, has now expanded to its first layer-2 with the launch on Base. Base is an L2 scaling network for Ethereum introduced by Coinbase in 2023.
Initially launched on the Ethereum blockchain, Morpho’s expansion onto Base allows it to tap into an expanding DeFi ecosystem. The protocol offers a peer-to-peer platform for liquidity, providing users with access to a more robust capital utilization rate.
Paul Frambot, the CEO of Morpho Labs, has expressed a change in perspective regarding the deployment on Base. In a post on X, Frambot mentioned that Morpho now has the potential to become the top lending and borrowing protocol on Base. He noted that while he was initially opposed to deploying on any other chain, the capacity to double Morpho’s TVL has prompted the change.
The launch on Base introduces several features, including MetaMorpho Vaults, which optimize yields through passive lending. Users can earn by depositing assets into a vault and can borrow from Morpho Markets by depositing collateral. For example, the cbETH/USDC market allows users to borrow the USDC stablecoin with cbETH as collateral.
With greater adoption of Base across the market, the potential onboarding of the next wave of users will be crucial to Morpho’s growth. According to DeFiLlama data, Morpho currently has a total value locked (TVL) of $1.82 billion, indicating a significant increase from the TVL of approximately $597 million at the start of the year. This suggests that the on-chain P2P layer has recorded a TVL increase of nearly 205% year-to-date.