Morpho vs Aave
Morpho and Aave are the two largest lending protocols, and they work differently. Aave pools everything on a network into one big market. Morpho splits lending into many small markets, each with one collateral, and lets curators run vaults on top. Here are their live rates side by side, then the differences in plain words. Right now, before token rewards, USDC vaults on Ethereum pay 5.39% on average, against 5.08% on Aave.
Data from Morpho's and Aave's APIs · updated
Earning: Morpho vaults vs Aave supply rate
Morpho average: what vaults with at least $100K deposited pay, weighted by size, after curators' fees. That is what a typical depositor earns. The best vault is the highest net APY among vaults with at least $1M, and it usually takes more risk. Aave: the supply APY on its main market for that network. Token rewards are left out on both sides: they come and go, and either protocol may pay them.
| Asset | Morpho average | Aave supply APY |
|---|---|---|
| USDCEthereum | 5.39%68 vaults, $943.0M | 5.08%$2.85B supplied |
| USDTEthereum | 3.71%22 vaults, $349.1M | 3.32%$2.70B supplied |
| ETHEthereum | 2.85%16 vaults, $89.45M | 1.41%$4.28B supplied |
| USDCBase | 4.15%33 vaults, $2.44B | 5.05%$195.2M supplied |
| ETHBase | 1.47%7 vaults, $13.02M | 1.34%$198.1M supplied |
| USDCArbitrum | 5.97%7 vaults, $3.60M | 2.91%$206.8M supplied |
| USDTArbitrum | 5.07%1 vault, $1.12M | 3.58%$43.68M supplied |
| ETHArbitrum | no vault with $100K+ | 0.88%$199.1M supplied |
Borrowing: the same loan on each
Morpho: the biggest market for that loan and kind of collateral on the network. Aave: its variable borrow APY, which is the same whatever collateral you post. Both before any token rewards. The liquidation limit is Morpho's LLTV and Aave's liquidation threshold for that collateral: the loan-to-value at which a loan can be liquidated.
| Loan | Morpho | Aave |
|---|---|---|
| USDC against BitcoinEthereum | 5.13%cbBTC / USDC | 5.98%WBTC collateral |
| USDC against ETHEthereum | 5.29%weETH / USDC | 5.98%WETH collateral |
| USDT against BitcoinEthereum | 3.66%WBTC / USDT | 4.26%WBTC collateral |
| USDT against ETHEthereum | 3.66%wstETH / USDT | 4.26%WETH collateral |
| ETH against staked ETHEthereum | 3.16%wstETH / WETH | 2.03%wstETH collateral |
| USDC against BitcoinBase | 5.32%cbBTC / USDC | 6.18%cbBTC collateral |
| USDC against ETHBase | 5.33%WETH / USDC | 6.18%WETH collateral |
| ETH against staked ETHBase | 1.75%cbETH / WETH | 2.00%wstETH collateral |
| USDC against BitcoinArbitrum | 7.43%WBTC / USDC | 3.98%WBTC collateral |
| USDC against ETHArbitrum | 6.71%wstETH / USDC | 3.98%WETH collateral |
| USDT against BitcoinArbitrum | 6.90%WBTC / USDT0 | 4.52%WBTC collateral |
| USDT against ETHArbitrum | no market | 4.52%WETH collateral |
| ETH against staked ETHArbitrum | no market | 1.90%wstETH collateral |
A higher liquidation limit lets you borrow more against the same collateral, but leaves less room before a price drop triggers a liquidation. Try the liquidation price calculator.
How Morpho and Aave differ
- Pooled vs isolated. On Aave, every asset on a network sits in one shared pool, and each deposit backs loans against any collateral Aave accepts there. On Morpho, each market pairs one loan asset with one collateral, so trouble in one market stays in that market.
- Who picks the risk. Aave's risk settings are voted on by its governance. On Morpho, curators decide which markets their vaults lend to, and depositors choose a curator by choosing a vault.
- Liquidation limits. Each Morpho market has one LLTV, fixed forever when the market is created. Aave's liquidation thresholds can be changed by governance. Morpho markets often allow higher loan-to-values for closely related assets.
- Fees. Aave keeps a share of borrowers' interest (the reserve factor). On Morpho, markets usually charge no protocol fee; vault curators charge a performance fee on the interest their depositors earn.
- Rates. Aave's rate curves are set per asset by governance. Morpho markets use one adaptive curve whose target rate drifts toward what borrowers are willing to pay. See how Morpho interest rates work.
Neither is simply better. Compare the rate, the collateral behind your money, and how quickly you could withdraw. For every Aave market, asset and rate history, see our sister site Aave Tracker.