Morpho launches Midnight fixed-term lending service on Base

Morpho officially launched Midnight, a fixed-rate lending agreement on Base

Morpho has officially launched its fixed-rate lending agreement Midnight on the Base network, adding a new credit layer to its on-chain lending network, aiming to bring the fixed-rate, fixed-term lending model closer to traditional financial markets.

Core Points

Morpho launched Midnight on Base, introducing fixed-rate and fixed-term lending capabilities to its on-chain credit network. The agreement allows lenders and borrowers to negotiate loan terms directly rather than relying on a variable rate pricing model. Moro said Midnight is designed to support institutional and personal lending, with more than $11 billion in deposits across its lending network. Midnight is reportedly now online after Morpho first introduced the agreement in a white paper in May, expanding its lending stack beyond the variable-rate agreement Morpho Blue. Deployment starts with Base, and Morpho plans to gradually expand to other blockchain networks, but has not provided a specific timetable.

Unlike most decentralized lending agreements that rely on floating rates, Midnight allows borrowers and lenders to directly negotiate loan terms, including interest rates, maturity dates, and counterparties. Paul Frambot, co-founder and CEO of Morpho, said the agreement was designed to mimic the structure of traditional credit markets, where fixed-rate lending remains mainstream. "Fixed-rate lending is the basis for the operation of global credit markets," Frambot said."Without it, the market on the chain would be incomplete."

According to Morpho, Midnight is a supplement to Morpho Blue rather than a replacement. Blue continues to provide variable-rate lending by isolating the lending market, while Midnight introduces an intent-based point-to-point matching system that separates pricing and risk management from on-chain execution to achieve fixed-rate, fixed-term credit.

Midnight introduces different lending models

Morpho said lenders and borrowers can negotiate their own loan terms without having to rely on pricing formulas embedded in the agreement. The company said the design is designed to support institutional and individual participants, while also supporting financing backed by tokenized real-world assets, structured credit products and repo transactions.

Responding to questions about competing agreements such as Pendle Finance, Term Finance and Notional Finance, Frabot said that most of the early fixed-rate products were built on a variable interest rate system. "In past attempts, fixed rates were built on top of variable rates, which was not perfect," Frabot said."The right thing to do is to build fixed rates at the bottom and then superimpose variable rate products on top of them."

Morpho already outlined this approach when it released its Midnight white paper in May. At the time, the project described Midnight as an intent-based peer-to-peer lending primitive that introduced customizable loan terms while remaining unmanaged and open source. Unlike Morpho Blue's pool-based architecture, Midnight directly matches lending intentions between participants and externalizes pricing and risk management. The agreement document also describes fixed-term loan positions as transferable assets, allowing secondary markets to form around existing credit positions rather than locking loans to maturity. Morpho believes this structure could bring the on-chain credit market closer to the traditional bond and term loan markets.

Existing networks provide early liquidity

Morpho believes that Midnight's architecture solves one of the major problems faced by previous fixed-rate lending agreements. In an earlier blog post, the project said past designs required lenders to invest capital before borrowers arrived, resulting in liquidity spreading between different maturities. According to Morpho, Midnight uses a quote-based system where lenders continue to earn variable returns through Morpho Blue until fixed-rate quotes are accepted. Once the quotes match, liquidity is provided only for the transaction, while positions with the same maturity date remain fungible. Moro said this allows users to enter or exit positions before expiration without spreading liquidity across markets.

Frabot also sees the agreement's quote book structure as another distinctive feature. Since Midnight was launched in Morpho's existing lending ecosystem, he said the agreement could immediately connect with more than 30 independent curators who already manage billions of dollars through Morpho Blue. He added that multi-market quotes, programmable compliance tools and callbacks allow capital to remain productive in the variable-rate market until a fixed-rate match occurs.

Institutional lending remains a focus

Midnight's launch comes as Morpho continues to expand its institutional lending business. In June, the Morpho Association raised $175 million in the largest round of funding in decentralized finance, led by Paradigm, a16z Crypto and Ribbit Capital, with investors such as Apollo Funds, Circle Ventures, VanEck, and Ledger Cathay. The deal reportedly values Morpho at approximately $2 billion, but the company did not disclose the valuation in an official announcement. Morpho said the funds will be used for technology development, business integration 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 and borrowers without relying on a decentralized lending system.

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 SG Forge, the regulated digital asset subsidiary of Societe Generale, have used their infrastructure to build online credit products. Earlier company announcements also listed that institutions such as Binance, Anchorage Digital and Galaxy Digital are integrating Morpho's lending software. Coinbase's online lending product is already running on Morpho Blue. When asked if the exchange planned to integrate Midnight into the service, a Coinbase spokesperson said there was no information to announce at this time. Although Coinbase did not comment further, Frabot said multiple platforms, institutions and partners have expressed interest in using Midnight.