Morpho has officially launched its fixed-rate lending protocol Midnight on Base, adding a new credit layer to its onchain lending network as it seeks to bring fixed-rate, fixed-term borrowing closer to traditional financial markets.
Summary
- Morpho has launched Midnight on Base, bringing fixed rate and fixed term lending to its onchain credit network.
- The protocol allows lenders and borrowers to negotiate loan terms directly instead of relying on variable rate pricing models.
- Morpho said Midnight is built to support institutional and retail lending, with more than $11 billion already deposited across its lending network.
The Block reported that Midnight is now live after Morpho first introduced the protocol through its white paper in May, expanding the project’s lending stack beyond Morpho Blue, its variable-rate lending protocol. The rollout begins on Base, with Morpho planning to extend support to additional blockchain networks over time, although the company has not provided a timeline.
Unlike most decentralized lending protocols that rely on floating interest rates, Midnight allows borrowers and lenders to negotiate loan terms directly, including interest rates, maturity dates, and counterparties. Morpho co-founder and CEO Paul Frambot said the protocol was built to mirror the structure of traditional credit markets, where fixed-rate borrowing remains the standard.
“Fixed-rate lending is fundamental to how global credit markets operate,” Frambot said. “Without it, onchain markets remain incomplete.”
According to Morpho, Midnight complements rather than replaces Morpho Blue. While Blue continues to provide variable-rate lending through isolated lending markets, Midnight introduces fixed-rate, fixed-term credit using an intent-based peer-to-peer matching system that separates pricing and risk management from onchain execution.
Midnight introduces a different lending model
Morpho said lenders and borrowers can negotiate their own loan conditions instead of relying on pricing formulas embedded within a protocol. The company said the design is intended to support institutional and retail participants while enabling financing backed by tokenized real-world assets, structured credit products and repo-style transactions.
Responding to questions about competing protocols including Pendle Finance, Term Finance and Notional Finance, Frambot told The Block that earlier fixed-rate products were largely built on top of variable-rate lending systems.
“In past attempts, fixed rates were built on top of variable rates, which was imperfect,” Frambot said. “The right approach is to build fixed rates at the primitive level, and layer variable-rate products on top.”
Morpho had already outlined this approach when it published the Midnight white paper in May. At the time, the project described Midnight as an intent-based primitive for peer-to-peer lending that introduces customizable loan terms while remaining noncustodial and open source. Unlike Morpho Blue’s pool-based architecture, Midnight matches lending intents directly between participants and externalizes both pricing and risk management.
The protocol’s documentation also described fixed-term loan positions as transferable assets, allowing secondary markets to form around existing credit positions instead of keeping loans locked until maturity. Morpho argued that this structure could make onchain credit markets behave more like conventional bond and term loan markets.
Existing network provides early liquidity
Morpho believes Midnight’s architecture addresses one of the main problems faced by previous fixed-rate lending protocols.
In an earlier blog post, the project said previous designs required lenders to commit capital before borrowers arrived, leaving liquidity fragmented across different maturities. According to Morpho, Midnight instead uses an offer-based system where lenders continue earning variable yields through Morpho Blue until their fixed-rate offers are accepted.
Once an offer is matched, liquidity is sourced only for that transaction, while positions sharing the same maturity remain fungible. Morpho said this allows users to enter or exit positions before maturity without dividing liquidity across separate markets.
Frambot also identified the protocol’s offer-book architecture as another distinguishing feature. Because Midnight launches within Morpho’s existing lending ecosystem, he said the protocol can immediately connect with more than 30 independent curators already managing billions of dollars through Morpho Blue. He added that multi-market offers, programmable compliance tools and callback functionality allow capital to remain productive in variable-rate markets until a fixed-rate match occurs.
Institutional lending remains a key focus
Midnight arrives as Morpho continues expanding its institutional lending business.
In June, Morpho Association raised $175 million in one of decentralized finance’s largest funding rounds, with Paradigm, a16z Crypto and Ribbit Capital leading the investment alongside Apollo Funds, Circle Ventures, VanEck, Ledger Cathay and several other investors. Fortune reported at the time that the transaction valued Morpho at approximately $2 billion, although the company did not disclose a valuation in its official announcement.
Morpho said the funding would support technical development, commercial integrations and wider adoption of its open credit infrastructure. Frambot said at the time that the project was building an open credit network capable of connecting capital providers with borrowers without relying on fragmented lending systems.
The company also said its lending network now holds more than $11 billion in deposits. According to Morpho, companies including Coinbase, Kraken, Bitwise Asset Management and Société Générale’s regulated digital asset subsidiary, SG Forge, already use its infrastructure to build onchain credit products. Earlier company announcements also listed Binance, Anchorage Digital and Galaxy Digital among organizations integrating Morpho’s lending software.
Coinbase’s onchain lending product already operates on Morpho Blue. Asked whether the exchange intends to integrate Midnight into that service, a Coinbase spokesperson told The Block that the company has nothing to announce at this stage.
Although Coinbase did not comment further, Frambot said multiple platforms, institutions and partners have expressed interest in using Midnight.
