As competition intensifies in decentralized finance, Morpho has emerged as a high-growth lending protocol bridging the gap between liquidity providers and borrowers. Initially launched on Ethereum, Morpho has expanded to Base, Coinbase’s fast-growing Layer 2 chain, to scale its lending products and reach broader DeFi audiences.
Overview
Morpho is an open-source, EVM-compatible lending protocol that optimizes decentralized lending performance by improving efficiency over traditional peer-to-pool models. Originally built on Ethereum Layer 1, Morpho has now been deployed on Base, an Ethereum Layer 2 network launched by Coinbase in 2023.This expansion marks a key strategic move to tap into Base’s high-throughput, low-fee environment while offering composable lending primitives to users and developers. By leveraging Base, Morpho aims to accelerate adoption, lower transaction costs, and position itself as a top-tier DeFi protocol on the L2.
Key Features
MetaMorpho Vaults
Morpho’s flagship feature on Base is MetaMorpho, a passive lending mechanism where users deposit assets into managed vaults. These vaults optimize yield through curated lending strategies, enabling passive income with minimized user interaction.
Morpho Markets
Custom money markets on Morpho allow users to lend and borrow using specific asset pairs. For example, users can deposit cbETH (Coinbase Wrapped ETH) and borrow USDC, creating more flexible collateralization opportunities than traditional pooled lending.
Base Integration
By launching on Base, Morpho gains access to a growing network of DeFi users, developers, and composable dApps—making it easier to integrate, scale, and innovate faster than on Layer 1 alone.
Ecosystem Activity
The deployment on Base coincides with a broader surge in Layer 2 adoption. As of March 2025, Base had surpassed $8 billion in TVL, growing more than 10x since January and outpacing Optimism to become the second-largest Ethereum L2 behind Arbitrum.Morpho itself has seen significant growth in 2025, with its Total Value Locked (TVL) rising from $598 million in 2024 to over $2.98 billion, according to DeFiLlama. The move to Base is expected to accelerate this momentum by lowering gas fees and broadening access to non-Ethereum-native users.
Funding and Backers
While the latest funding details were not specified in the recent announcement, Morpho previously received backing from well-known crypto-native VCs, including a16z crypto, Variant, and Coinbase Ventures. These investors have consistently supported DeFi infrastructure with long-term potential.
Token Utility
Morpho does not currently operate with a native token for utility or governance. However, future token plans may be introduced as the protocol expands its footprint across Layer 2s and grows its ecosystem of MetaMorpho strategies and custom markets.
Airdrop Participation
There is no official airdrop program active at this time. However, early users of the Morpho protocol, especially those interacting with MetaMorpho or Morpho Markets on Base could be positioned favorably should future retroactive rewards be announced. Users can follow @MorphoLabs for updates.
Why It Matters
Morpho’s expansion to Base isn’t just a deployment—it’s a strategic shift. Here’s why it’s worth watching:
- TVL Growth Trajectory: Morpho tripled its TVL in under a year, now exceeding $1.8B.
- Base Ecosystem Synergy: Tapping into Coinbase’s growing user base on Base, Morpho positions itself as a leading lending layer on one of the fastest-growing Ethereum L2s.
- Innovative Yield Tools: MetaMorpho vaults offer passive, optimized returns—catering to both DeFi power users and newcomers.
- Custom Markets Advantage: Morpho’s ability to support specific asset pairings (like cbETH/USDC) offers greater flexibility than generalized lending protocols.
With low fees, tailored lending markets, and passive vault strategies, Morpho is shaping up to be a key DeFi player on Ethereum’s L2 frontier.
For more information, visit morpho.org or follow @MorphoLabs.
