When you discover a tool that lets you earn passive income, unlock liquidity, and maximize your crypto portfolio without selling your assets, you act fast.
Morpho is one of those tools.
This powerful lending and borrowing protocol on Ethereum and its Layer-2 networks gives you access to competitive yields, flexible loans, and transparent on-chain mechanics all with full control in your own wallet. If you’ve been looking for a smarter, safer way to put your crypto to work, this guide walks you through everything you need to know.
Let’s dive in and transform the way you manage your digital wealth.
⭐ Why Morpho Deserves Your Attention
Morpho operates on Ethereum, Base, and several other EVM-compatible chains, meaning you can use popular wallets like Rabby, Coinbase Wallet, Trust Wallet, MetaMask, and more. Once connected, you can:
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Supply crypto to earn yield
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Borrow stablecoins against your ETH or BTC exposure
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Use wrapped Bitcoin (like cbBTC or WBTC) as collateral
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Maintain complete control over your private keys
The best part? It’s non-custodial. Your assets stay in your wallet until you choose to supply or withdraw them.
🚀 Step 1: Connect Your Wallet and Select Your Network
In the top-right corner of the Morpho interface, connect a wallet that supports Ethereum-style blockchains.
Most users choose:
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Ethereum Mainnet — universal support
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Base — faster and cheaper gas fees
Either will work, but Base is often the most cost-efficient.
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🔥 Step 2: Fund Your Wallet With Gas and Assets
Every blockchain transaction requires a small fee, so make sure your wallet contains some ETH for gas on both Ethereum and Base.
What assets should you hold?
Morpho primarily revolves around three powerful assets:
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USDC — the main stablecoin for earning and borrowing
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ETH — popular collateral with staking-enabled versions available
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BTC via wrapped tokens — cbBTC (Coinbase) or WBTC (other providers)
If you’re using Bitcoin as collateral, you’ll use a wrapped version because native BTC cannot exist directly on EVM chains. Wrapped tokens represent your Bitcoin 1:1 while unlocking smart-contract functionality.
You can obtain wrapped BTC in two ways:
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Withdraw BTC from Coinbase over Base → it appears as cbBTC
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Swap ETH or USDC for cbBTC/WBTC on Base DEXs like Aerodrome or Uniswap
Now you’re ready to start earning or borrowing.
💰 Step 3: Earn Passive Yield by Supplying USDC
Head to Earn → Vaults.
You’ll see several USDC vaults, each backed by different types of collateral from borrowers. Select a vault where:
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The asset is USDC
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The collateral type aligns with your preference (Bitcoin, ETH, etc.)
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The APY meets your expectations
A popular choice is the Spark USDC Vault, which often features strong liquidity and competitive yields.
What to expect:
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Variable APY – adjusts based on supply and demand
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Native rewards – interest paid in USDC
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Morpho incentives – additional token rewards you can claim anytime
Simply enter the amount you want to supply, confirm the transaction, and start earning instantly.
Withdrawals are just as easy one click, and your USDC flows back into your wallet along with any accumulated interest.
🏦 Step 4: Borrow USDC Against Your Crypto
Want to unlock liquidity without selling your ETH or BTC?
Go to Borrow → Markets.
Choose the asset you want to use as collateral ETH, staked ETH, cbBTC, WBTC, or others. Each market displays:
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Collateral asset
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Interest rate
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Loan-to-value (LTV) limit
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Total liquidity
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Current borrow demand
For example, if you choose cbBTC as collateral, you can deposit wrapped Bitcoin and take out a USDC loan at a variable borrow rate.
⚠️ Manage Your Loan-to-Value Wisely
Most vaults allow a maximum LTV of around 86% but borrowing that high is extremely risky. Crypto is volatile, and if your collateral drops in price, your LTV rises.
When LTV becomes unsafe, the protocol automatically sells some collateral to protect lenders.
Smart borrowers keep LTV between 10% and 30% for peace of mind.
You can always:
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Add more collateral
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Repay part of your loan
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Withdraw unused collateral (if your LTV allows)
🔄 Step 5: Repaying and Withdrawing Collateral
Whenever you’re ready to close your loan, visit Your Positions and select Repay.
You can repay using:
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USDC in your wallet
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Your collateral (automatically swapped to USDC)
After repayment, you can withdraw your collateral in full and return it to your exchange, wallet, or any other use case you choose.
This flexibility is why so many users rely on Morpho for liquidity management instead of selling strategically valuable assets like ETH or BTC.
Take Control of Your Crypto Start Using Morpho Today
Morpho gives you a clean, reliable, and empowering way to:
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Earn passive yield
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Borrow without selling your long-term assets
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Move liquidity in and out effortlessly
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Maintain full transparency and self-custody
If you’re ready to take action, this is your moment.
Connect your wallet, choose your network, and begin building smarter, faster, and with more confidence than ever.
Your crypto should work for you not the other way around.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Canadas is not responsible for any financial losses.
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