Shift DeFi Exits USDC Vault from Morpho Lending Markets Amid Liquidity Drop

Shift DeFi, a non-custodial decentralized finance (DeFi) platform, reported that its automated risk system pulled its Liquid USDC Vault out of several Morpho lending markets after detecting a sharp drop in available liquidity.

The platform stated that all affected positions were fully exited with no loss of funds and that the vault has been temporarily paused for review. The vault invests in USDC, a stablecoin pegged to the US dollar and issued by Circle.

Shift DeFi reported that its proprietary risk system detected the liquidity drop across multiple Morpho markets used by the vault and automatically triggered an exit. The team monitored execution as it happened and completed the unwinding only when liquidity returned.

The Liquid USDC Vault remains in public beta, with a total value locked (TVL) of approximately $1.17 million at the time of the report. Shift DeFi's documentation outlines a vault-and-container architecture that allocates capital across strategies, including Morpho vault positions.