Morpho

Morpho started as a layer on top of Aave and Compound, matching a depositor to a borrower directly whenever possible to improve the rate for both sides and leaving the unmatched remainder in the underlying pool, so nobody had to leave a familiar protocol to use it.

The current design is different and more interesting. The base layer consists of deliberately minimal, immutable markets: one collateral asset, one borrowed asset, one price source and a fixed liquidation threshold each. A market cannot be altered after creation, so a depositor reads terms nobody will rewrite, and trouble in one market does not spread to another. Above them sit vaults run by external curators who allocate deposits across markets and own the risk decisions.

That separation — a parameterless core beneath curators competing for depositors — is what distinguishes Morpho from peers where governance edits the parameters. MORPHO itself is the governance token.

Base markets are immutable once created, so risk selection moves to vault curators — their choices determine a depositor's outcome.