# Morpho 101

*what's morpho? what's morpho vaults? how does morpho work?*

By [BeyondDeFI](https://paragraph.com/@beyonddefi) · 2024-09-04

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Aave has been leading the way in the realm of lending & borrowing. But, some obvious issues w Aave are:

*   Discrepancy betn lending and borrowing rates
    
*   varying interest rates.
    

an emerging star in this space is morpho, with already $1.5B supplied they are set to create a more capital efficient, trustless & permissionless liquidity marketplace for users & protocols.

a quick view of how morpho works.

(1) Morpho Protocol: A decentralised platform that enables efficient permissionless market creation.

Key abilities:

*   Deposit funds in vaults.
    
*   all markets are contained within a single smart contract. This design simplifies the protocol and significantly reduces gas consumption when users interact with multiple markets.
    
*   Integrate Morpho protocol in your dapp.
    

(2) Morpho Vaults: A place where lenders can deposit their money and earn APY from borrowers and/or underlying pools.

Each vault can have a owner, curator, allocator(s) & guardian each w unique responsibilities, to ensure optimal functioning of the vault.

some % of funds from the vault is sent to morpho market for borrowers to borrow from.

anyone can create a run a vault permissionlessly.

![](https://storage.googleapis.com/papyrus_images/61e95d6ae154b8723f7c9cfd3d6c0c3b.png)

![](https://storage.googleapis.com/papyrus_images/83a4ad3219fe2162801ab5dd7306a7ee.png)

![](https://storage.googleapis.com/papyrus_images/0fc2c3329994d48b006a02f46894bbd6.png)

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*Originally published on [BeyondDeFI](https://paragraph.com/@beyonddefi/morpho-101)*