Morpho Launches Fixed-Rate Lending Protocol Midnight on Base

Morpho, a decentralized finance lending protocol, has launched Midnight, a fixed-rate, fixed-term lending protocol, on the Base network.

The Block reported on July 21 that Morpho formally launched Midnight on Base after unveiling the product in May. Midnight is designed to complement Morpho Blue, Morpho’s existing variable-rate lending protocol.

Morpho aims to use the launch to expand on-chain credit markets. Traditional credit markets operate on fixed rates and set maturities, while most DeFi lending protocols today are built around variable rates.

“Fixed-rate lending is core to how global credit markets function,” Morpho co-founder and Chief Executive Officer Paul Frambot said. “Without it, on-chain markets are incomplete.”

Midnight is designed to let lenders and borrowers negotiate terms directly instead of relying solely on a pricing formula set by the protocol. Users can structure loans by setting the interest rate, maturity and counterparty.

The protocol will be available to both institutional and retail users. Morpho said Midnight can support financing backed by tokenized real-world assets, structured credit products and repo-style transactions that use collateral to raise short-term funding.

Frambot also highlighted a difference from earlier fixed-rate lending protocols. “Past attempts built fixed rates on top of floating rates, and that was incomplete,” he said. “The right approach is to build fixed rates at the base layer and then place floating-rate products on top.”

Midnight is launching first on Base. Morpho plans to expand the protocol to other blockchains, but did not disclose a timeline or specify which networks it may add.

Morpho also said its lending network now holds more than $11 billion in deposits. Coinbase, Kraken, Bitwise Asset Management and SG-Forge, the digital-asset subsidiary of Societe Generale, are using Morpho’s infrastructure to build on-chain credit products.