morpho-builder

Morpho Builder Skill

Experimental (pre-v1.0) — SDK recommendations, API schemas, and best practices may evolve as the protocol tooling matures.

Reference guide for building applications that integrate with the Morpho lending protocol. For operating on the protocol directly in a conversation, use the morpho-cli skill instead.

Prefer Morpho v2. The Morpho Optimizer (Morpho-Aave, Morpho-Compound) is deprecated. For new vault deployments, prefer vault v2 over MetaMorpho (vault v1). Note: the two vault versions have incompatible ABIs — use vaultV2Abi for v2 vaults and metaMorphoAbi for v1 vaults. Match the ABI to the on-chain contract.

Protocol Overview

Morpho Blue — isolated lending markets. Each market is defined by five parameters: loan token, collateral token, oracle, interest rate model (IRM), and liquidation LTV (LLTV). Markets are identified by a MarketId (hash of these parameters).

Morpho Vaults v2 — the newer vault contract. ERC-4626 compliant. Allocates deposits across multiple markets via adapters, which can wrap MetaMorpho (v1) vaults and Morpho Blue markets. Preferred for new vault deployments. In the SDK: vaultV2Abi, VaultV2, fetchVaultV2.

MetaMorpho (vault v1) — the original vault contract. Still functional and widely deployed on-chain. In the SDK: metaMorphoAbi, Vault, fetchVault. The two vault versions have incompatible ABIs — use the correct one for the contract you're interacting with.

Singleton contract: 0xBBBBBbbBBb9cC5e90e3b3Af64bdAF62C37EEFFCb — same address on Ethereum (chain 1) and Base (chain 8453) via CREATE2.

Key Entities

Entity	Identifier	Description
Market	MarketId	Isolated lending pool with specific collateral/loan pair
Vault	Address	Multi-market aggregator, ERC-4626. Two versions: v2 (VaultV2) and MetaMorpho v1 (Vault) — ABIs differ
Position	User + Market/Vault	User's supply/borrow in a market or deposit in a vault
Token	Address + decimals	ERC-20 — decimals vary (USDC/USDT = 6, WETH/DAI = 18)

Key Quantities

Quantity	Format	Notes
APY	Decimal (0.0534 = 5.34%)	From GraphQL state.netApy
LLTV	Raw 1e18 (860000000000000000 = 86%)	From SDK or API
Token amounts	Raw units	Divide by 10^decimals for human-readable. Use parseUnits/formatUnits from viem
Health factor	Ratio	≥ 1.0 = safe, < 1.0 = liquidatable

SDK Registry

All packages are published under @morpho-org on npm.

Package	Purpose
@morpho-org/blue-sdk	Core types, entity classes (Market, Vault, VaultV2, Position, MarketParams), and constants
@morpho-org/blue-sdk-viem	Viem augmentation — ABIs, fetch helpers (fetchMarket, fetchVault, fetchVaultV2, fetchPosition)
@morpho-org/blue-sdk-ethers	Ethers augmentation — same fetch helpers as viem, for Ethers-based projects
@morpho-org/blue-sdk-wagmi	React hooks (useMarket, useVault, usePosition, etc.) wrapping core SDK. Requires wagmi v2
@morpho-org/blue-api-sdk	GraphQL SDK with typed queries for the Morpho API
@morpho-org/simulation-sdk	Framework-agnostic simulation of Morpho operations
@morpho-org/simulation-sdk-wagmi	React hooks for client-side simulation (useSimulationState)
@morpho-org/bundler-sdk-viem	Multi-step transaction bundling (approvals, transfers, Morpho ops in one tx)
@morpho-org/liquidity-sdk-viem	Liquidity monitoring and bot infrastructure
@morpho-org/liquidation-sdk-viem	Liquidation bot infrastructure
@morpho-org/migration-sdk-viem	Migration from Aave/Compound to Morpho
@morpho-org/consumer-sdk	Abstraction layer for Morpho's complexity
@morpho-org/morpho-ts	Time and format utilities
@morpho-org/test	Vitest/Anvil test fixtures for Morpho
@morpho-org/test-wagmi	Wagmi test config extension of @morpho-org/test
@morpho-org/morpho-test	Framework-agnostic test fixtures

SDK Details

@morpho-org/blue-sdk

Types, entity classes, and constants.

• Market — class with operation methods (.supply(), .borrow(), .repay(), .withdraw()) and conversion methods (.toSupplyAssets(), .toBorrowAssets())
• MarketParams — new MarketParams({ loanToken, collateralToken, oracle, irm, lltv })
• MarketId — branded type identifying a market
• Position — new Position({ supplyShares, borrowShares, collateral })
• VaultV2 — vault v2 entity class (preferred for new integrations)
• Vault — MetaMorpho (vault v1) entity class
• VaultConfig — configuration class for MetaMorpho vaults

@morpho-org/blue-sdk-viem

ABIs, fetch helpers, and viem augmentation.

ABI catalog — import these instead of hand-rolling ABI JSON:

Export	Contract
blueAbi	Morpho Blue singleton
vaultV2Abi	Vault v2 (preferred for new deployments)
vaultV2FactoryAbi	Vault v2 factory
metaMorphoAbi	MetaMorpho / vault v1 (use for existing v1 vaults)
metaMorphoFactoryAbi	MetaMorpho factory / vault v1
erc2612Abi	ERC-2612 permit
permit2Abi	Uniswap Permit2
wstEthAbi	Wrapped stETH
adaptiveCurveIrmAbi	Morpho's adaptive curve IRM
blueOracleAbi	Morpho oracle

Fetch helpers — fetchMarket, fetchVaultV2 (v2) / fetchVault (v1), fetchPosition read on-chain state into SDK entity objects. Use the fetch helper matching the on-chain vault version. Entity methods include market.toSupplyAssets(), vault.toShares(), etc.

@morpho-org/blue-sdk-wagmi

React hooks wrapping the core SDK. Requires wagmi v2.

Hooks: useMarket, useVault, usePosition, useToken, useHolding, useMarkets, useVaults, usePositions, useTokens, useHoldings, useVaultMarketConfig, useVaultMarketConfigs, useVaultUser, useVaultUsers, useMarketParams, plus plural variants.

@morpho-org/simulation-sdk + @morpho-org/simulation-sdk-wagmi

Client-side simulation of Morpho operations. useSimulationState hook provides simulated post-state for UI previews without submitting transactions.

GraphQL API

Endpoint: https://api.morpho.org/graphql

Key queries: vaults (fields: address, name, symbol, asset, state.netApy, state.totalAssets) and markets (fields: uniqueKey, loanAsset, collateralAsset, state.supplyApy, state.borrowApy, state.utilization, lltv).

Filters and Pagination

Filter	Example	Notes
chainId_in	[1], [8453], [1, 8453]	Required — always specify chain
assetSymbol_in	["USDC"]	Filter by asset symbol
address_in	["0x..."]	Filter by vault address
uniqueKey_in	["0x..."]	Filter by market ID
userAddress_in	["0x..."]	Filter positions for a user

Paginate with first and skip. Iterate until items.length < first.

Value Interpretation

Field	Format	Conversion
netApy / supplyApy / borrowApy	Decimal	0.0534 = 5.34%
totalAssets	Raw string	Divide by 10^asset.decimals
lltv	Raw 1e18 string	Divide by 1e18 for percentage

Integration Approaches

• Direct SDK (viem) — for backends, scripts, bots. Use createPublicClient + readContract/encodeFunctionData with ABIs from @morpho-org/blue-sdk-viem.
• React (wagmi + SDK hooks) — for frontend apps. Use useVault, usePosition, etc. from @morpho-org/blue-sdk-wagmi with useSendTransaction from wagmi.

Protocol Mechanics

Dead Deposits (Inflation Attack Protection)

Detailed reference

ERC-4626 vaults are vulnerable to share-price inflation attacks on their first deposit. A dead deposit — minting shares to the burn address 0x000000000000000000000000000000000000dEaD — must be the very first transaction on any new vault or market. Any user deposit before this enables the attack.

Vault V2 — target shares depend on the asset's decimals:

Formula: targetShares = max(1e9, 10^(6 + max(0, 18 - decimals))) — 18-dec assets: 1e9, 8-dec: 1e16, 6-dec: 1e18. Call vault.mint(TARGET_SHARES, 0xdead).

Market V1 — fixed 1e9 shares regardless of decimals. Call morpho.supply(marketParams, 0, 1e9, 0xdead, "").

Vault V1 — 1e9 shares standard; use 1e12 for tokens with fewer than 9 decimals.

Active-cap requirement: When a Vault V2 references underlying markets/vaults, 0xdead must also hold:

• 1e9 supplyShares in each Market V1 with non-zero vault caps
• 1e9 shares in each Vault V1 with non-zero caps or present in withdraw queues

AdaptiveCurveIRM

Detailed reference

Morpho's approved IRM uses a two-pronged mechanism:

1. Curve — instantly adjusts rates when utilization changes (e.g., 90% ↔ 0% scales rate ×4 or ÷4)
2. Adaptive — continuously shifts the target rate over time based on sustained utilization

Utilization	Rate behavior
0%	Halves every ~5 days
90% (target)	Stable
100%	Doubles every ~5 days

Operational warnings: Avoid 100% utilization — rates compound aggressively. Seed markets with initial supply immediately after creation; an empty market at 0% utilization triggers automatic rate decay.

Slippage and Share/Asset Conversion

Detailed reference

The exchange rate between assets and shares can shift between transaction preparation and on-chain execution. With a proper dead deposit this is a UX concern, not a security vulnerability, but integrations should still protect users.

Defensive pattern: Use previewDeposit() to estimate shares, apply a 1% tolerance floor, verify actual result meets minimum.

Full withdrawals: Use redeem(), not withdraw() — avoids leaving dust behind.

Vault V2 quirk: maxDeposit, maxMint, maxWithdraw, and maxRedeem always return zero. Do not rely on these for capacity checks.

Bad Debt Tracking

Detailed reference

• V1.0: Realized immediately — share price drops atomically for all suppliers in the affected market. Vulnerable to flash-loan amplification of bad debt realization.
• V1.1+: Tracked via lostAssets field — share price is unaffected until explicit realization. Prevents flash-loan manipulation.

Common Pitfalls

Detailed reference

Pitfall	Consequence	Prevention
Missing dead deposit	Inflation attack / share-price manipulation	Seed shares to 0xdead before any user deposit
withdraw() for full exit	Dust remains in position	Use redeem() for full exits
Oracle risk blindness	Liquidations with stale or manipulated prices	Check oracle type, freshness, and known risks before integrating a market
ERC4626 vault as collateral	Share-price manipulation (Cream-hack style)	Avoid V1.0 vaults as collateral; V1.1+ without bad debt realization are safer
ERC4626 vault as loan asset	Unpredictable liquidation incentives	Do not list any ERC4626 vault as a loan asset
Ignoring vault governance	Owner/curator can reallocate to risky markets	Audit role holders; document trust assumptions to users

Safety Notes

Addresses: Discover via GraphQL API or SDK fetch helpers. Present candidates to the user for confirmation before use. Never hardcode vault, market, or token addresses.

Chain: Always parameterize — accept chain as a function parameter. Never assume Ethereum or Base. Morpho is deployed on both chains at the same singleton address.

Write flow: All write operations follow: query → prepare → simulate → confirm → execute. Simulate transactions before execution to catch reverts early. The server returns unsigned transactions — your app handles signing.

Token decimals: USDC/USDT = 6, WETH/DAI = 18. Read decimals from the API or contract — never assume 18. Use parseUnits(amount, decimals) for conversion.

USDT approval quirk: Must reset allowance to 0 before setting a new value. Implement as a conditional check for USDT or as a general reset-before-set pattern.

DAI permit: Non-standard — use ERC-20 approve() instead of EIP-2612 permit.

Health factor: For borrow operations, validate the health factor after the intended borrow. Prevent proceeding if the position would become unsafe (health factor < 1.0). Warn at ~1.1.

Dead deposits: Any vault or market creation must include the dead deposit as the first transaction. See Protocol Mechanics > Dead Deposits above.

Testing

• @morpho-org/test — Vitest/Anvil fixtures for Morpho-specific test setup.

Best Practices

Prefer vault v2 for new deployments: When creating new vaults, prefer vault v2 over MetaMorpho (v1). When interacting with existing vaults, match the ABI to the on-chain contract — vaultV2Abi for v2, metaMorphoAbi for v1. They are not interchangeable.

Prefer Morpho Blue over Morpho Optimizer: The original Morpho Optimizer (Morpho-Aave, Morpho-Compound) is deprecated. Prefer Morpho Blue contracts and SDKs for new integrations.

No Bundler3: Deprecated. Do not reference in new code.

ABIs: Always import from @morpho-org/blue-sdk-viem. Never hand-roll ABI JSON.

Post-Implementation Review

After finishing code or a plan, review it against these Morpho-specific checks before presenting the result. For each, mark CRITICAL (fund loss), WARNING (broken UX), or N/A.

1. Dead Deposit Protection — vault/market creation includes dead deposit to 0xdead as the first tx; correct formula per version (reference)
2. Slippage Protection — deposits/withdrawals use preview functions + tolerance check; full exits use redeem() not withdraw(); no reliance on Vault V2 max* functions (reference)
3. IRM Awareness — new markets seeded promptly; no sustained 100% utilization; APY formulas correct (reference)
4. Bad Debt Safety — no V1.0 vault as collateral; no ERC4626 vault as loan asset; dashboards surface lostAssets (reference)
5. Token Approvals — USDT resets allowance to 0 first; DAI uses approve() not permit() (reference)
6. Vault Governance — UI surfaces role holders; trust assumptions documented (reference)
7. General Safety — no hardcoded addresses; chain ID parameterized; decimals read not assumed; write ops simulate before execute; health factor validated; ABIs from @morpho-org/blue-sdk-viem