Morpho, a decentralized finance (DeFi) lending and borrowing protocol originally built on the Ethereum blockchain, has now launched as the first layer-2 solution on Base. Base is an L2 scaling network for Ethereum introduced by Coinbase in 2023.
By transitioning to Base, Morpho aims to capitalize on the expanding DeFi ecosystem. The protocol provides users with a peer-to-peer platform for liquidity, enhancing their ability to access a more efficient capital utilization rate.
Morpho Makes History as First Layer-2 Protocol on Base
Paul Frambot, CEO of Morpho Labs, shared insights on the decision to deploy on Base, highlighting a shift in perspective from initial opposition to expanding onto a second chain.
In a recent post on X, Frambot acknowledged the launch of Morpho on Base, marking a significant milestone as the first L2 deployment for the protocol. He noted a change in strategy over the past two years, initially favoring a narrow focus on Ethereum. However, evolving circumstances have now positioned Morpho to potentially emerge as the leading lending and borrowing protocol on Base.
“Today, Morpho is launching on Base, its inaugural L2 platform. I was initially hesitant about expanding to another chain, preferring Morpho’s concentrated approach. Back then, we didn’t foresee the potential for new deployments to double Morpho’s TVL. But times have changed.”
Frambot also speculated that the Base platform could potentially surpass the Ethereum version within the next year, underscoring optimism for Morpho’s growth trajectory on the new scaling network.
Earn, Borrow, Build: Morpho’s Expansion on Base
Morpho’s debut on Base introduces several new functionalities that the community can capitalize on. One notable feature is the MetaMorpho Vaults, designed to optimize yields through passive lending. Users earn rewards by depositing assets into these vaults.
Additionally, Morpho Markets enable users to borrow funds by depositing collateral. For example, in the cbETH/USDC market, users can borrow USDC stablecoins against cbETH as collateral.
As Base gains traction across the market, attracting the next wave of users will be pivotal for Morpho’s expansion. Currently, according to DeFiLlama data, Morpho boasts a Total Value Locked (TVL) of $1.82 billion.
Comparatively, at the beginning of the year, Morpho’s TVL was around $597 million, signaling a robust 205% increase year-to-date in the on-chain peer-to-peer lending layer.
