Morpho Surpasses US$ 5 Billion in Outstanding Loans Amid Stablecoin Dominance

Morpho has reached a record US$ 5 billion in outstanding loans, according to data reported by Messari on September 1. This milestone brings the protocol closer to Aave in the decentralized credit market and increases its visibility among companies that use its infrastructure.

Despite reaching this significant mark, Aave remains ahead with more than US$ 12.7 billion in active loans, compared to Morpho's US$ 4.83 billion. In total value locked, Aave has US$ 17.7 billion, while Morpho has US$ 9.55 billion.

The composition of Morpho's portfolio is concentrated in stablecoins, with a staggering 95% of its outstanding loans denominated in these assets. The dollar-credit against crypto-collateral base plays a central role in this expansion, particularly through the crypto-collateralized lending product launched by Coinbase in January.

This growth has also placed Morpho at the center of episodes involving markets built on its infrastructure. For instance, a misconfiguration in Paxos' PAXG oracle was pointed out by DeFi researcher Warhol, which would have inflated the value of the collateral and allowed the taking of about US$ 230,000 in USDC against something close to US$ 350 in PAXG.