MORPHO reached a total value locked (TVL) of $11.78 billion, becoming the second largest lender. This development came as most DeFi protocols were struggling after broader industry disruption due to the KelpDAO hack.
The hack left Aave Protocol, which leads the DeFi TVL lending industry, with bad debts of $200 million, while MORPHO’s exposure was just $1 million across two isolated markets.
Therefore, users started migrating to other protocols like SparkLend, which they considered more secure. Such observations suggested that MORPHO could overtake Aave, although the certainty of the timing was indeterminate.
MORPHO and AAVE dominate the lending sector
Morpho (MORPHO) comes in second, with just under half of AAVE’s TVL of $27 billion.
Its ETH-denominated TVL tripled year-over-year (YoY) to approximately 2.9 million ETH. This means that MORPHO’s dominance in this sector was 16.82%.
Additionally, its active loans reached $4 billion, about a third of AAVE’s at $11.75 billion. The second-largest lending protocol’s annualized fee was $175 million, a fraction of AAVE’s $938 million.
Even though MORPHO’s dominance was much lower than that of Aave (AAVE), the growth indicated a changing preference due to security concerns.
Institutional involvement
MORPHO was also beginning to become institutionally involved. For example, loans originating from Coinbase totaled $2.17 billion in USDC, half of all its active loans.
Additionally, Apollo Global, a company with $940 billion in assets under management, announced its support. The partnership aimed to expand lending infrastructure.
With this in mind, Apollo Global has committed to acquire 90 million MORPHO over the next 48 months, directly or through its subsidiaries. This move suggests significant accumulation, which would inject more capital into the altcoin.
Understanding MORPHO’s uptrend since April
On the charts, the altcoin has been trending higher since the beginning of April. Since then, most DeFi tokens have declined as the hacks took place in early April. Therefore, the altcoin is up 100% year to date (YTD).
MORPHO was trading above ascending trendline support. The MACD bars showed that the selling pressure had almost subsided as the altcoin traded at support.
The altcoin also aligned with AAVE, as indicated by a correlation coefficient (CC) of 0.81.
Holding above support could take the altcoin back to $2.40 or higher. Conversely, a break below would delay the uptrend as it could indicate a change in market structure.
Overall, the altcoin was far from overtaking AAVE in this sector, but that could change abruptly if the latter continues to face security concerns.
Final summary
- MORPHO’s TVL stands at $11.78 billion, becoming the second largest lending protocol.
- MORPHO price has been trending upward since early April and the charts reflect the strength of the chain.
