Lending Markets

Rosetta routes capital to lending markets across two protocols: Morpho and Aave. Each protocol has a different market architecture.

Morpho Markets

A Morpho lending market is an isolated pool where lenders supply assets and borrowers take loans against collateral. Each market is defined by five parameters:

Parameter	Description
Collateral asset	Asset borrowers lock (e.g., HYPE, ETH, BTC)
Loan asset	Asset lenders supply and borrowers receive (e.g., USDC, USDT0)
LLTV	Liquidation Loan-to-Value, threshold at which positions become liquidatable
Oracle	Price feed used to value collateral
IRM	Interest Rate Model, determines rates based on utilization

Utilization Utilization is the ratio of borrowed assets to total supplied assets: Utilization = Total Borrowed / Total Supplied Supply APY = Borrow APY × Utilization × (1 − Fee) Utilization drives rates. Higher utilization means higher rates. Lower utilization means lower rates. Liquidity Available liquidity = Total Supplied - Total Borrowed This is what can actually be borrowed at any moment. When utilization is high, available liquidity is low. Price Per Share (PPS) Lenders receive shares representing their claim on the pool. As interest accrues, total assets grow while shares stay constant. The ratio (assets/shares) increases over time. This is how yield is realized without explicit payments. Isolation Markets are isolated. A WHYPE/USDC market and a kHYPE/USDC market share nothing: different collateral, different risk parameters, different utilization. Bad debt in one market does not affect others. Morpho markets are available on both HyperEVM and Base.

Aave Markets

Aave uses a pooled lending model where multiple assets share a single lending pool. Unlike Morpho’s isolated markets, Aave pools aggregate supply and demand across assets.

Parameter	Description
Reserve asset	The asset being supplied and borrowed (e.g., USDT0, USDC)
aToken	Interest-bearing token received when supplying (represents your deposit + accrued interest)
Variable rate model	Interest rate determined by pool utilization with configurable slope parameters
Liquidity index	Cumulative multiplier tracking total interest accrued since pool inception

How Aave Differs from Morpho

Aspect	Morpho	Aave
Architecture	Isolated markets per collateral/loan pair	Pooled lending across assets
Interest tracking	Price Per Share (PPS)	Liquidity index + aToken balance
Rate model	Adaptive Curve IRM (self-adjusting)	Variable rate with configurable slopes
Risk isolation	Full — each market independent	Shared pool — oracle risk affects all assets

The Yield Router evaluates Aave supply APY alongside Morpho vault APY when making allocation decisions.

Rosetta

Yield Router

Markets & Yields

Risk Intelligence

Reference

Morpho Markets

Aave Markets

​Morpho Markets

​Aave Markets

Morpho Markets

Aave Markets