Morpho 🦋

The 1→100 moment for vaults is here. Morpho Vaults V2 is a new open-source standard designed to power the future of asset curation. Live now on @ethereum and soon onchain everywhere.

Felix has no exposure to rsETH Over the past day, lenders across DeFi have been withdrawing liquidity out of 1) fear of rsETH exposure and 2) overall concern with DeFi protocol security. To address both concerns briefly: 1) Again, Felix has no rsETH exposure and 2) Felix Vanilla is built with @Morpho's infrastructure; this allows us to inherit Morpho’s smart contract security and risk-isolated design, so Felix vaults only have exposure to the specific markets they lend to (e.g. If another curator on Morpho lends to rsETH collateral, this does not lead to negative impact on Felix lenders) Some current supply rates on Felix for those interested: >USDH Flagship: 19.01% ($4m USDH supplied) >USDH Frontier: 23.97% ($11m USDH supplied) >USDC Flagship: 11.31% ($31m USDC supplied) >USDC Frontier: 24.48% ($18m USDC supplied) These rates will likely be arbed down in the days to come as lenders enter to take advantage, realizing Felix has no rsETH exposure, and borrowers repay freeing up more available liquidity. For more information on who is currently withdrawing to create these high supply rates / whether this is one large whale or a number of addresses, check the four links below from HyperEVMScan for each Felix vault mentioned above—TLDR: withdrawals from these vaults have been spread across a number of different addresses, not one address. >USDH Flagship: hyperevmscan.io/address/0x207c… >USDH Frontier: hyperevmscan.io/address/0x274f… >USDC Flagship: hyperevmscan.io/address/0x8A86… >USDC Frontier: hyperevmscan.io/txs?a=0x808f72… For those less aware, "Frontier" vaults and "Flagship" vaults lend to different collateral markets (Frontier vaults tend to lend to higher max LTV collateral markets--higher risk + higher return). To see all current collateral exposure for each vault on Felix, check out: usefelix.xyz/vanilla/stats For more risk metrics across Felix vaults, feel free to check out our internal risk monitoring platform here: vaults.anthias.xyz If you have questions on Felix's risk practices, how we build with Morpho, current collateral exposure, how we price collateral, how Flagship vs Frontier vaults differ, etc, feel free to DM me

Quick update following the $rsETH exploit on Unichain: All RockawayX vaults are safe and have zero exposure to rsETH. → Our Kamino RockawayX RWA vault is unaffected by his design. That being said, we're actively coordinating with each RWA team to ensure the safety of their liquidity sleeves. → Our Morpho RockawayX vaults also have no exposure to rsETH and remain liquid. We'll keep monitoring and share updates as needed on any contagion risk and adjust the risk parameter accordingly.

Yesterday, shortly after the recent events involving Kelp DAO and the LayerZero Bridge, the Morpho Association paused the OFT bridge for the MORPHO token on Arbitrum as a precautionary measure. Arbitrum bridging will remain paused until the root cause of the rsETH incident is identified.

As a follow up to the recent events involving Kelp DAO, I want to reiterate the following: - Morpho smart contracts are safe and continue to operate as intended. - The exposure was limited with curators taking preemptive measures immediately. - Only ~$1M of ETH is borrowed against rsETH as collateral, across two isolated markets out of thousands. - Of this, only 2 of ~500 Morpho Vaults (with >$10k in deposits) have exposure to these markets, with the final impact dependent on how the situation unfolds. - Every other vault is not exposed thanks to Morpho’s fully isolated market design. Although the direct impact to Morpho was limited, there may still be second order effects due to broader ecosystem exposure. Stay safe.

Update on the Kelp DAO rsETH incident. Within minutes, we activated our emergency playbook across the KPK Morpho vaults: • Direct rsETH exposure: Exit agents activated on the rsETH market in KPK ETH Prime, zeroing supply caps and withdrawing available liquidity. Remaining exposure winds down automatically as liquidity returns to the market. • Indirect exposure: As a precaution, we reduced exposure to markets whose collateral assets have Aave exposure, across all our vaults. • Deposits temporarily paused: ETH Prime, ETH Yield, and USDC Prime. The latter two have no direct rsETH exposure. This is a protective measure to prevent secondary effects during an active incident. • Gearbox unaffected: rsETH-related assets were not actively used as collateral, and quotas have been set to zero as a precaution. We will re-enable deposits once the situation stabilises and continue to share updates.

Kelp's rsETH was exploited earlier today, around 3 pm EST. Initial reports indicate $300 million has been impacted in an active attack. Sentora Vaults and client strategies have no exposure to rsETH. The borrow rate for WETH on Aave has become elevated, and LST/LRT looping strategies are now negative carry. We continue to monitor the situation closely and are in active communication with clients and partner protocols as the situation develops. While LST/LRT carry trades are currently in negative carry, we dont see liquidations as a risk in the short term. On stablecoins, the exploit prompted many LPs to withdraw stablecoins across a number of protocols. This has spiked supply yields across our vaults. As we have no exposure to rsETH, we expect rates to fall in the coming hours.

Earlier today, KelpDAO suffered an exploit related to rsETH. Gauntlet vaults and strategies have no exposure to rsETH and other KelpDAO assets. Our optimization engine was triggered and precautionary risk-off actions were taken in response to potential liquidity, volatility and contagion scenarios. Alongside our automated engine, the risk team has been continually, manually reviewing and adjusting Gauntlet-curated vault parameters based on evolving market conditions.

There is no exposure from Kelp on any Steakhouse vaults or products on any chain. At 18:40 UTC we picked up a potential exploit on rsETH from Kelp. We removed all residual exposure (dust <$0.01 on Smokehouse ETH on mainnet) by 18:52 UTC and supply caps of the vaults put to empty. All markets have been completely removed by 19:31 UTC. We continue to monitor potential downstream effects, if any, on contagion-related effects.

🔴 @Morpho is now a unicorn - a major announcement at the French Ministry of Finance. “We are France’s first DeFi unicorn” - @faufleuret Fun fact: Morpho is now the most valuable French startup per employee ($26M), ahead of Mistral AI ($17M).

.@Morpho is live on LI.​FI Earn. With this integration, any app, wallet or fintech can access Morpho’s onchain yield strategies across chains - out of the box. Expanding access to the universal lending network, one vault at a time.

.@PaulFrambot speaking to 300 bankers at the French Ministry of Finance: “The problem is that traditional finance is extremely fragmented: there are over 15,000 banks, and it’s inefficient. To access liquidity, you have to source it from all over the world. @Morpho is a protocol designed to unify that liquidity at a global scale. The real question is: how will you position yourself in this revolution?” Uneasy laughs in the room - but many agree. Huge panel.

sUSDat is now live on @Morpho, curated by @Flowdesk_co.

Almost $30B in tokenized RWAs today. $100B projected by end of 2026. Most of them still sit passively. @Morpho is one of the main venues where they start working. deSPXA, tokenized S&P 500 index exposure, is live there as collateral. Curated by @SteakhouseFi. USDC can be borrowed against deSPXA. Distribution gets the asset onchain. Utility keeps it there.

Today, we're excited to announce that Unified Labs is joining @Morpho as a Curator — the first RWA-focused Curator from Asia. 🦋 Tokenization without DeFi is only half the story. RWA lending is the next massive opportunity in onchain finance. Trillions in real-world assets are moving onchain — but most of them just sit there. No lending markets, no composability, no capital efficiency. The quick details: - Unified Labs curates Vaults specialized in RWA lending — tokenized treasuries, MMFs, credit assets, funds, equities, and precious metals as collateral for onchain borrowing markets. - Asia has long lacked a Curator with localized expertise. Unified Labs is here to fill that gap. - Unified Labs has already partnered with leading institutional players across Asia to bridge TradFi assets into DeFi lending markets. More to come. Stay tuned.

Sentora is powering @FireblocksHQ's new Earn feature as a launch partner, giving enterprise customers access to onchain yield strategies through @Morpho's DeFi infrastructure. For more on how it works, read here👇 medium.com/sentora/sentor…

Learn more about Earn on Fireblocks

Earn on Fireblocks, powered by Morpho $200B+ in stablecoins flow through @FireblocksHQ monthly, but none was put to work. Until today. Fireblocks brings stablecoin yield opportunities by trusted institutional curators, such as @SentoraHQ, to its 2,400+ enterprise customers.

Great to see Morpho top of mind right after Bitcoin, Ethereum and Hyperliquid

HELOCs will soon be made productive on @Morpho via PRIME from @Figure. What are HELOCs? Home Equity Lines of Credit: revolving, flexible borrowing secured by the home value. DeFi is no longer an isolated island; it’s now truly delivering solutions for real-world use cases.

Catalysis is live on Ethereum. Introducing Covered Vaults. DeFi vaults with built-in risk coverage, backed by real delegated capital, and enforced onchain 🧵👇