Morpho Surges Past $5B in Outstanding Loans, Closes Gap on Aave

Morpho's outstanding loans have hit an all-time high of $5 billion, according to Messari. This brings it closer to Aave, which has long held the top spot in decentralized lending.

The majority of Morpho's borrowing is denominated in stablecoins, with 95% of the total being in USDC. In fact, USDC accounts for 62% of the $5 billion, indicating that users are primarily using it for dollar credit against crypto collateral rather than leveraged speculation on volatile tokens.

Morpho's growth has been fueled by its 'DeFi Mullet' model, a crypto-backed loan product launched in partnership with Coinbase. This has driven around $1.3 billion in outstanding USDC borrowing backed by about $2.5 billion of cbBTC collateral.