DeFi
DeFi Morpho protocol becomes first L2 to launch on Base
Morpho, a decentralized finance (DeFi) lending and borrowing protocol on Ethereum, has become the first Layer 2 to launch on Base, an L2 scaling network for Ethereum that Coinbase introduced in 2023.
While Morpho was initially launched on the Ethereum blockchain, it is now going live on Base to leverage a growing DeFi ecosystem.
Morpho is a protocol that offers a peer-to-peer platform for liquidity, allowing users to benefit from a more robust capital utilization rate.
Morpho is the first L2 on Base
Paul Frambot, CEO of Morpho Labs, commented on the Base rollout, noting that while he initially opposed the idea of expanding to a second chain, “things have changed.”
In a job On Tuesday on X, Frambot said Morpho now has the capacity to become the first lending and borrowing protocol on Base.
“Today, Morpho is launching the first L2 in its history on Base. Over the past two years, I have opposed any deployment to another channel because I wanted to keep Morpho focused. At the time, we could not envisage a new deployment doubling Morpho’s TVL. But things have changed.
In any case, the protocol’s base platform could surpass the Ethereum version within the next year, the Morpho Labs CEO added.
Earn, borrow, build
The launch of Morpho on Base brings several features that the community can exploit. It includes MetaMorpho Vaults, a feature that enables optimized returns through passive lending. Users earn when they deposit assets into a vault.
Users can also borrow from Morpho Markets, accessing it when they post collateral. For example, the cbETH/USDC market allows borrowing the stablecoin USDC with cbETH as collateral.
As Base experiences increasing market adoption, the potential onboarding of the next wave of users will be crucial to Morpho’s growth.
Currently, DeFiLlama data indicates that Morpho has a total value locked (TVL) of $1.82 billion.
At the start of the year, TVL stood at around $597 million, suggesting that the on-chain P2P layer saw a TVL increase of almost 205% year-to-date.