Morpho glossary: every term explained in plain words
Plain definitions of the Morpho terms on vault and market pages: LLTV, curator, allocator, timelock, utilization, rate at target, bad debt and more.
Updated
Morpho pages are full of short technical words. This glossary explains each one in a sentence or two, with a link to where you can see it on a live page. Terms are in alphabetical order.
A to C
Adaptive Curve IRM
The interest rate model most Morpho markets use. It aims to keep 90% of a market's money lent out: above 90% the rate climbs steeply, below it the rate falls. The whole curve also drifts up or down over time while the market stays away from 90%. See how Morpho interest rates work.
Allocator
An address a vault's curator trusts to move money between the vault's markets, within the limits (caps) the curator has set. Allocators chase better rates and keep cash available for withdrawals.
APR and APY
APR is a simple yearly rate. APY includes the effect of interest earning interest. Morpho adds interest continuously, so the APY shown is a little higher than the matching APR. See Morpho APY explained.
Bad debt
A loan whose collateral is now worth less than what is owed, so liquidating it cannot repay lenders in full. On Morpho the loss stays inside that one market and is shared by its lenders. The bad debt page lists every case.
Borrow share price
How much a market's borrowers owe per unit of debt. It grows exactly with the interest they pay, which is why this site uses it to measure exact daily loan rates, as on the Coinbase Bitcoin loan rate page.
Cap
The most a vault may lend into one market, set by its curator. Vault V2 also has relative caps (a share of the vault) and caps for a whole kind of collateral.
Collateral
What a borrower locks up to get a loan, such as cbBTC or wstETH. In Morpho, collateral is not lent out and earns no interest; it only backs the loan.
Curator
The team that runs a vault: it chooses which markets the vault may lend to and sets the caps. See the curator rankings and what curators do.
F to L
Guardian
An optional role on V1 (MetaMorpho) vaults that can cancel a pending change before its timelock runs out, as a safety brake.
Health factor
Collateral value times the market's LLTV, divided by the debt. Above 1.00 a loan is safe from liquidation; below 1.00 it can be liquidated. Check any address with the wallet checker.
Idle cash
Money in a vault that is not lent out. It earns nothing but can be withdrawn at once.
Liquidation
When a loan reaches its market's LLTV, anyone can repay part of it and take the borrower's collateral at a discount. The liquidations page shows every recent one.
Liquidation incentive (penalty)
The extra collateral a liquidator receives for repaying a bad loan, paid out of the borrower's collateral. It is set by the market's LLTV: about 4.4% at an 86% LLTV, and up to 15% for low LLTVs.
LLTV (liquidation loan-to-value)
The loan-to-value at which a loan in a market can be liquidated, fixed when the market is created. A market with an 86% LLTV liquidates a loan once the debt reaches 86% of the collateral's value. Try the liquidation price calculator or read LLTV and liquidations explained.
Loan asset
What lenders supply and borrowers take out in a market, most often a stablecoin such as USDC.
Loan-to-value (LTV)
Your debt divided by the value of your collateral. It rises when the collateral's price falls or when interest adds to the debt.
M to P
Market
A single Morpho lending pool with one loan asset, one collateral, one oracle, one interest rate model and one LLTV. Launched as Morpho Blue, now also called Morpho Markets V1. Browse them on the markets page.
MetaMorpho (Vault V1)
Morpho's first vault design. It takes one asset and lends it across Morpho markets chosen by its curator.
Midnight
Morpho's fixed-rate, fixed-term lending. Lenders and borrowers trade units that each repay one token on a set date, and the discount sets the fixed rate. See today's fixed rates.
Net APY
What a vault's depositors earn after the curator's fees, including any reward tokens. The number to compare between vaults.
Oracle
The price source a market uses to value collateral. A wrong oracle price can trigger unfair liquidations or let bad loans through. See Morpho oracles explained.
Performance fee and management fee
A performance fee is the share of interest a vault's curator keeps. A management fee, possible on Vault V2, is a small yearly charge on the money in the vault. Both are already taken out of the net APY.
Pre-liquidation
An optional arrangement a borrower can opt in to, where a loan is partly closed a little before it reaches the LLTV, with a smaller penalty.
Public allocator
A tool that lets anyone, usually a borrower who needs more cash, pull money into a market from a vault's other markets, within limits the vault sets. It is why a market can lend more than the cash it holds right now.
R to Z
Rate at target
The borrow rate a market charges at 90% utilization. The rest of the rate curve is built around it, and it moves over time.
Rewards
Extra tokens, such as MORPHO, paid on top of interest. They can stop at any time.
Sentinel
A role on Vault V2 that can act fast in an emergency, such as pulling money out of a market or lowering a cap. It can make a vault safer but not riskier.
Share price
What one share of a vault is worth. It grows as borrowers pay interest, and its growth over time is a vault's real return.
Stuck market
A market where every dollar is lent out and borrowers will not repay, usually after the collateral failed. Interest keeps compounding at the top rate, so its figures grow on paper only.
Timelock
A waiting period before a curator's risky changes, such as adding a market, take effect, so depositors can leave first if they disagree.
Utilization
The share of a market's supply that is borrowed. It drives the interest rate: the fuller the market, the higher the rate.
Vault
A pooled deposit that lends one asset across several markets on your behalf, run by a curator. Compare them on the vaults page or read how Morpho vaults work.
Vault V2
Morpho's newer vault design. It adds adapters that can connect to more places to lend, caps by share and by collateral, sentinels, and an optional management fee.
Withdrawable
How much of a vault could be taken out right now, because it sits idle or in markets with unborrowed cash. The rest waits until borrowers repay.
Common questions
What does LLTV mean on Morpho?
LLTV is the liquidation loan-to-value: the point, set when a market is created, at which a loan in that market can be liquidated. At an 86% LLTV, a loan is liquidated once the debt reaches 86% of the collateral's value.
What is a curator on Morpho?
A curator is the team that runs a Morpho vault. It chooses which markets the vault may lend to and how much can go into each, and usually keeps a share of the interest as a fee.
What is utilization on Morpho?
Utilization is the share of a market's supplied money that is currently borrowed. Morpho's rate model raises the rate steeply above 90% utilization and lowers it below.
What is the public allocator?
It lets anyone pull a vault's money into one of its markets from its other markets, within limits the vault sets. Borrowers use it when a market runs short of cash.