Invest1 publisher3 min readPublished
Morpho holds about 70% of the record $2.75bn borrowed on Base
Artemis put outstanding loans on Coinbase's Layer 2 at a record $2.75bn on September 10, and roughly $1.92bn of that sits in Morpho vaults reachable through Coinbase's own borrowing screen at advertised rates from 5%.
The Investor · Invest desk
What happened
- Artemis put outstanding loans on Base at a record $2.75 billion on September 10, following a pickup in lending activity in late August.
- DeFiLlama puts Base's lending total value locked at about $4.56 billion, of which Morpho accounts for roughly $3.94 billion and Aave V3 for about $511 million.
- Morpho's Base vaults carry about $1.92 billion in active loans, while Aave V3 on Base carries about $354 million.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- exposure Coinbase customers who never opened a protocol interface are now downstream of Morpho vault settings, so an oracle, curator or collateral failure there lands on an exchange support queue.
- constraint Coinbase handles the customer and Morpho the on-chain side, so the 5% floor Coinbase advertises depends on deposits arriving in vaults Coinbase does not operate.
- contradiction Cryptopolitan credits the Coinbase wrapper with Base's growth and hedges it in the same breath, saying the arrangement "might account for" the increase, which leaves the size of the consumer channel unsettled.
- precedent Base's own 2026 plan puts deeper stablecoin borrowing and lending at the centre, so routing exchange customers into third-party vaults is the growth path the chain is planning for.
Of the $2.75bn Artemis counted on September 10 [1], about $1.92bn is in Morpho and $354m in Aave V3 [2][5], so two protocols hold roughly 83% of everything borrowed on the chain [2]. Morpho alone is close to 70% [1]. Its share of deposits is larger: $3.94bn of Base's $4.56bn lending TVL, or 86% [6]. Aave's smaller pool is worked harder, with $354m drawn against $511m supplied, a 69% utilisation against Morpho's 49% [5][4].
Coinbase's crypto-backed loan sits on top of that book. Qualifying customers borrow USDC against crypto, capped at $5m against bitcoin in the US, with liquidation at 86% and advertised rates as low as 5% [6][7][8]. Five hundred and fifty loans at that cap would fill the entire record [7]. A borrower who draws to half the value of the collateral is liquidated after bitcoin falls about 42% [10].
Cryptopolitan describes the division of labour as Coinbase managing customer relations while Morpho provides all of the on-chain infrastructure [16]. The article does not say how much of the $2.75bn originated through Coinbase's borrow screen. Artemis wrote on September 11: "Lending on @base is accelerating." [15]
The volume caveat in the same report attaches to a different number. A February analysis found about half of January's $5.3 trillion adjusted USDC volume on Base came from a small number of DeFi contracts, and some Morpho transactions were flash loans, borrowed and repaid in the same deal [11][12]. A flash loan repaid inside one transaction leaves no balance outstanding, so it lifts volume without touching a stock figure like $2.75bn. The concentration is the sharper issue, and Cryptopolitan makes it directly: dependence on few protocols and collateral markets, with Coinbase as a distribution channel into Morpho, raises the stakes on smart-contract, oracle, curator and collateral-risk controls [17].
Two readings fit these figures. The consumer one has Coinbase routing retail borrowers into Morpho vaults, which is how the product is built [16]. The other has professional collateral users concentrating where USDC liquidity is deepest, and Base's 2026 strategy names deeper stablecoin liquidity through trading, borrowing and lending as the aim [18]. I lean to the second, because Morpho's Base vaults are only half drawn [4] and no single customer can borrow more than $5m [7]; a published breakout of Coinbase-originated loans would settle it, and I would drop the view if that breakout showed retail carrying most of the balance.
Morpho raised $175m in June, Standard Chartered initiated coverage of Morpho and Aave according to Galaxy, and Cryptopolitan reported earlier this month that Morpho's outstanding loans across chains reached an all-time high of $5bn [9][13][10]. Base holds about 38% of that [8].
What to watch
- Any published breakout of how much of Base's loan book originates through Coinbase's borrow screen, from Coinbase or Artemis.
- Whether the roughly $1.81bn of Base lending TVL that is not currently drawn gets borrowed or withdrawn.
- Whether Aave V3's $354m Base book grows against Morpho's, which would loosen the single-protocol concentration.