Morpho Surpasses $5 Billion in Outstanding Loans, Closes Gap on Industry Leader Aave
Morpho's outstanding loans have reached an all-time high of $5 billion, reported by crypto analytics firm Messari on September 1. This marks a significant milestone for the decentralized lending protocol and brings it closer to Aave, its longtime industry leader.
The majority of Morpho's borrowing is denominated in stablecoins, with USDC accounting for 62% of this total. According to Messari, 95% of the $5 billion outstanding loans are in stablecoins, indicating that users are utilizing the protocol for dollar credit against crypto collateral rather than leveraged speculation.
The growth of Morpho's loan volume is largely attributed to its 'DeFi Mullet' model, a crypto-backed loan product launched by Coinbase on Morpho rails in January 2025. This product has driven around $1.3 billion in outstanding USDC borrowing backed by approximately $2.5 billion of cbBTC collateral.
Aave still maintains the lead in the industry with over $12.7 billion in active loans, but Morpho's growth is narrowing the gap between the two protocols.