Peer-to-Peer Lending
In pool-based lending (Aave, Compound), there's always a spread between what lenders earn and what borrowers pay - because utilization is never 100%. Morpho eliminates this inefficiency by matching lenders and borrowers directly at a P2P rate that's better for both sides.
P2P Matching Visualizer
Matching Queue Animation
Watch how Morpho processes the matching queue in real-time. Green particles are lenders, blue are borrowers. When they meet in the middle, they're matched at the P2P rate.
How P2P Matching Works
A user supplies or borrows through Morpho. The protocol checks if there's a counterparty to match with.
If a match exists, both sides get the P2P rate. If not, funds go to the underlying Aave/Compound pool at pool rates.
As new users arrive, Morpho re-evaluates. Previously unmatched positions can get matched when new counterparties appear.
Pool Spread vs P2P Rate
The P2P rate is typically set at the midpoint of the pool's supply and borrow rates. This means lenders earn more than the pool supply rate and borrowers pay less than the pool borrow rate. The wider the pool's spread, the more both sides benefit from being matched.