Morpho Deploys Midnight Fixed-Rate Lending Protocol on Ethereum

Morpho deployed its fixed-term, fixed-rate lending protocol Midnight on Ethereum on September 8, expanding the product from Base to Ethereum. According to ChainCatcher, Ethereum users can now borrow USDC against WBTC or cbBTC collateral, and Morpho co-founder Merlin Egalite said the rollout will begin with the USDC | cbBTC and USDC | WBTC markets before expanding further. Midnight differs from Morpho Blue in rate structure. Blue uses open lending with rates that change according to a formula, while Midnight trades credit units at market prices with fixed terms, allowing borrowers to know financing costs in advance and lenders to lock in returns instead of facing per-block rate changes. Midnight lenders buy credit units at a price below the one-to-one redemption value at maturity. The protocol’s largest potential source of liquidity remains constrained. Morpho Vaults, which hold about $500 million in deposits, can still only allocate to Morpho Blue markets until the DAO enables Midnight configurations. Morpho co-founder and CEO Paul Frambot said enabling Vault configuration requires only one DAO transaction, and he expects Vault activation in the fourth quarter. At launch, Ethereum Midnight markets had about $7.41 million in total deposits and $2.63 million in outstanding loans.