How much leverage can I take? It depends on the Morpho market’s liquidation LTV. The protocol enforces a 0.25% buffer below that threshold. Most correlated pairs support 3-8x. Non-correlated pairs typically support less (3-5x) because price divergence between collateral and loan token can be large.
What is the difference between correlated and non-correlated markets? Correlated means the collateral and loan token track each other in price, like sUSDe and USDC. Lower liquidation risk. A yield fee applies on profits at close. Non-correlated means the two assets move independently, like ETH and USDC. Higher liquidation risk. A deposit fee applies on capital entering the position instead of a yield fee at close.
Can I manage my position after opening it? Yes. You can increase leverage, add collateral, repay debt, or borrow against your collateral. None of these require closing and reopening the position.
What happens if I get liquidated? Morpho liquidators repay your debt and take your collateral. Depending on how far underwater the position is, you may receive little or nothing back. Use
supplyCollateral() or repay() to keep your LTV healthy before it reaches the threshold.
Can I exit early? Yes.
deleverage() works at any time. You may face swap slippage depending on market conditions, but the exit path is always available as long as a swap route exists for your collateral.
What if there is no swap route to exit? You can deleverage manually. Withdraw a portion of your collateral, convert it to the loan token off-protocol via unstaking, repay part of the debt, and repeat until the position is fully closed. If needed, contact the team and the contract owner can enable Manual Mode on your UserProxy upon your request, letting you interact with Morpho directly.
What are the fees? Correlated pairs: 5% yield fee on profits only. If you break even or exit at a loss, no fee is charged. Non-correlated pairs: deposit fee on capital entering the position. Currently set to 0%, maximum 1%. A 0.1% swap fee applies on the internal flash loan swap when opening a leveraged position. No management fees, no withdrawal fees beyond gas.
Is my capital safe? The protocol is non-custodial. Your funds sit in an isolated UserProxy on Morpho. Three independent audits have been completed by Phage Security, Cyfrin, and Sherlock. That said, smart contract risk, market risk, liquidation risk, and oracle risk are all real. Understand them before committing capital.
Who can interact with my position? Anyone can add collateral or repay debt on your behalf. Only you as the position owner can deleverage, increase leverage, borrow, or withdraw collateral.
What can the protocol owner do? The owner can add or remove supported markets and swap routers, adjust fees within the hardcoded caps, update the treasury address, pause all protocol operations in an emergency, and enable Manual Mode on a UserProxy upon request from the position owner. The owner cannot move your funds, change your position, or bypass the liquidation buffer.