Building the most secure lending protocol on Ethereum. 

Compound and AAVE are the most forked protocols aside from Uniswap, which speaks to the strength and soundness of their designs.

But is this gonna be the final form that lending markets will take? Can @morpho Blue's new model emerge to challenge their dominance?

Contributor at Blockcrunch. Writing Ceteris Paribus - musings at the intersection of crypto, econ, and policy.

https://michaellwy.substack.com/

Check out my latest post on Blockcrunh

https://blockcrunch.substack.com/p/morpho-blue-a-new-defi-bluechip-in

Earlier this year, Morpho Labs launched Morpho Blue.  It seeks to be the base layer of lending markets with a trustless and permissionless design.

Overall there are 4 core features:

(1)  Morpho Blue consists of isolated pairs, which are individual markets with their own set of assets, collateral, and risk parameters. Each isolated pair operates autonomously without the need for manual intervention from the DAO to adjust risk parameters.

(2) Morpho Blue is a lending primitive with permissionless market creation. It enables the deployment of isolated lending markets by specifying one loan asset, one collateral asset, a liquidation LTV (LLTV), and an oracle.

(3) Through Morpho Blue, asset managers can create MetaMorpho Vaults, which are more specialized lending markets that can be curated for different risk profiles.

(4) Another innovation of Morpho Blue is AdaptiveCurveIRM (Interest rate model), it is a model that targets a 90% utilization and can dynamically shift the rate curve up or down as a whole depending on the current utilization vs. target utilization.

Morpho's initial product, Morpho Optimizer, is a peer-to-peer (P2P) matching layer built on top of existing lending pools. It utilizes a matching engine to connect borrowers and lenders, providing a better rate for both parties compared to the interest rates determined by the lending protocols.