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 initially launched on the Ethereum blockchain, its going live on Base to tap into a growing DeFi ecosystem.
Morpho is a protocol that offers a peer-to-peer platform for liquidity, with users able to tap into a more robust capital utilization rate.
Paul Frambot, the CEO of Morpho Labs, commented on the deployment on Base, noting that while he originally opposed the idea of expanding onto a second chain, “things have changed.”
In a post on X on Tuesday, Frambot said that Morpho now has the capacity to become the top lending and borrowing protocol on Base.
“Today, Morpho is launching on Base, the first L2 in its history. For the past two years, I have been opposed to deploying on any other chain because I wanted Morpho to maintain a narrow focus. At the time, we couldn’t envision a new deployment doubling Morpho’s TVL. But things have changed.”
In any case, the protocol’s Base platform could outpace the Ethereum version in the next one year, the Morpho Labs CEO added.
Earn, borrow, build
Morpho’s launch on Base brings several features that the community can look to leverage. It includes MetaMorpho Vaults, a feature that provides for optimized yields via passive lending. Users earn when they deposit assets into a vault.
Users can also borrow from Morpho Markets, accessing this when they deposit a collateral. For instance, the cbETH/USDC market allows one to borrow the USDC stablecoin with cbETH as collateral.
With Base seeing greater adoption across the market, the potential onboarding of the next wave of users will be crucial to Morpho’s growth.
Currently, DeFiLlama data indicates Morpho has a total value locked (TVL) of $1.82 billion.
At the start of the year, the TVL stood at approximately $597 million, which suggests the on-chain P2P layer has recorded a TVL increase of nearly 205% year-to-date.