Morpho Expands Fixed-Rate Midnight Market to Ethereum

ChainCatcher report: On September 8, the decentralized lending protocol Morpho deployed its fixed-term, fixed-rate lending protocol, Midnight, on Ethereum, expanding its product from the Base network to Ethereum. Ethereum users can now access USDC loans collateralized by WBTC or cbBTC. Merlin Egalite, co-founder of Morpho, stated that the Ethereum launch will begin with the “USDC | cbBTC and USDC | WBTC markets” and gradually expand. The key distinction between Midnight and Morpho Blue lies in interest rate certainty: Blue offers open-ended loans with variable rates determined by a formula, while Midnight trades credit units at market-determined prices with fixed terms, allowing borrowers to lock in financing costs upfront and lenders to secure returns without exposure to per-block rate fluctuations. Midnight lenders purchase credit units at a price below their one-to-one redemption value at maturity. However, Midnight’s largest potential source of capital remains restricted: Morpho Vaults, which hold approximately $5 billion in deposits, can currently only allocate funds to Morpho Blue markets until the DAO enables Midnight configuration. Paul Frambot, Morpho’s co-founder and CEO, noted that enabling Vault configuration requires only a single DAO transaction, but Vault activation is expected to occur in the fourth quarter. At launch, the total deposits on the Ethereum Midnight market amounted to approximately $7.41 million, with outstanding loans of about $2.63 million.