Morpho launches fixed-rate lending protocol Midnight on Base to expand onchain credit markets

Morpho has publicly launched Midnight, a fixed-rate, fixed-term lending protocol on Base, after unveiling the protocol in May. Morpho Midnight complements Morpho Blue, the project's existing variable-rate lending protocol.

The launch is aimed at expanding onchain credit markets by bringing fixed-rate lending onchain. Traditional credit markets rely on fixed interest rates and defined loan terms, while most decentralized lending protocols today use variable rates. Morpho co-founder and CEO Paul Frambot said Midnight is designed to close that gap by allowing participants to structure loans with defined rates, maturities, and counterparties in a way that aligns more closely with institutional credit markets.

"Fixed-rate lending is fundamental to how global credit markets operate," Frambot said. "Without it, onchain markets remain incomplete."

Morpho said Midnight allows lenders and borrowers to negotiate their own loan terms rather than relying on protocol-set pricing formulas. It is available to both institutional and retail users and is designed to support a broader range of onchain credit activity, including financing backed by tokenized real-world assets, structured credit products, and repo-style transactions.

When asked how Midnight differs from other fixed-rate, fixed-term lending protocols such as Pendle Finance, Term Finance and Notional Finance, Frambot said many previous approaches built fixed-rate products on top of variable-rate lending systems.

"In past attempts, fixed rates were built on top of variable rates, which was imperfect," Frambot told The Block. The right approach is to build fixed rates at the primitive level, and layer variable-rate products on top, he added.

Morpho recently said in a blog post that previous attempts at fixed-rate lending didn't see much traction "because of the capital commitment required up front, which kept liquidity thin and split it across maturities."

"Morpho Midnight addresses these constraints with offered capital," the project said at the time. "A lender keeps their funds productive on Morpho Blue, earning variable rates, until their fixed-rate offer is taken. Positions sharing a maturity are fungible, allowing early exit and late entry, which stops liquidity from fragmenting. And because liquidity is expressed through offers and only sourced when an offer is taken, a market can be bootstrapped before steady flow arrives."

Frambot also pointed to Midnight's offer-book architecture as a key differentiator. He said the protocol benefits from Morpho's existing ecosystem of more than 30 independent curators managing billions of dollars across Morpho Blue, allowing Midnight to launch with an established network of participants rather than building one from scratch. He added that features such as multi-market offers, programmable compliance, and callbacks allow capital to remain deployed in variable-rate markets until it is matched into a fixed-rate position.

Midnight launches first on Base. Asked whether Coinbase plans to integrate Midnight into its onchain loans product, which already runs on Morpho Blue, a Coinbase spokesperson said the company has nothing to share at this stage. Frambot said, "many platforms, institutions, and partners are interested in using Midnight."

Frambot also said Morpho plans to expand Midnight beyond Base over time, though he did not provide a timeline or name specific blockchain networks.

Morpho says its lending network has more than $11 billion in deposits, with companies including Coinbase, Kraken, Bitwise Asset Management, and Société Générale's regulated digital asset arm, SG Forge, using its infrastructure to build onchain credit products.