Morpho Midnight Expands to Ethereum

The decentralized lending protocol Morpho deployed its fixed-term, fixed-rate lending agreement, Midnight, to Ethereum on September 8, expanding its services to Ethereum users who can now borrow USDC against collateralized WBTC or cbBTC. The Ethereum launch will start with the USDC | cbBTC and USDC | WBTC markets and will gradually expand. The core difference between Midnight and Morpho Blue lies in interest rate certainty; Midnight trades credit units at market-priced rates, allowing borrowers to lock in financing costs in advance while lenders can secure returns. Lenders in Midnight purchase credit units at prices below the one-to-one redemption value at maturity. The largest potential source of funds for Midnight remains constrained, as Morpho Vaults, holding approximately $5 billion in deposits, can only allocate to the Morpho Blue market until the DAO enables the Midnight configuration. Morpho co-founder and CEO Paul Frambot stated that enabling the Vault configuration requires just one DAO transaction, with Vault activation expected to occur in the fourth quarter. At launch, the total deposits in the Ethereum Midnight market were approximately $7.41 million, with outstanding loans around $2.63 million.

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