DeFi

Compound on @0xpolygon is powered by Morpho.

🔹 Lenders deposit into Compound's Morpho-powered vaults, which allocate to Morpho Markets
🔹 Borrowers borrow directly from Morpho Markets
🔹 All accessible via the Compound Blue interface built by @papercliplabs

Super interesting case study on power of discoverability / front ends. Polygon is paying out ~1.5M USD equivalent in rewards over 120 days on their Morpho-powered lending vaults on Polygon POS. 

This implementation's frontend isn't hosted on Morpho's canonical front end and but is hosted by a 3rd party. 

USDC deposits on the Polygon vaults have reached 7M USDC and yields have now dropped from 10% to 6%, yet borrow utilization is <1%. Utilization on similar Morpho vaults on Base are close to 80%.  

Assuming you're using BTC as collateral, borrowers are paying >3x (~4.75%) to borrow USDC on compared to what they could pay on Polygon (~1.6%). 

Can this disconnect be driven purely via lack of discoverability or something else (e.g. trust assumptions of borrowing on Polygon PoS are different than trust trust assumptions of borrowing on Base?)

Contributing to OP Labs. Come join me on the track if you’re in /austin @ atxsprint.club

maxxing on /morpho 🦋 | pursuing a higher self w /higher-athletics | consistently curious

Agreed not apples to apples comparison yet, but still surprising to see lack of vault utilization - esp when people are paying a larger premium to borrow on other deployments.

There’s definitely a question of distribution. Your front-end = your users. Think Moonwell, Seamless, also Coinbase. 

In saying this, building liquidity on new protocol/network takes time, so we need to give more time to Gauntlet/Compound teams to judge them fairly in comparison w +8 months on Base.