A Morpho vault pools USDC and lends it through Morpho markets. When Earn deposits your USDC into a vault, your wallet receives shares representing its portion of the vault. As borrowers pay interest, the value of those shares increases.
- Approved USDC vaults only. Earn uses curated Morpho vaults that accept USDC.
- Shares remain in your wallet. Their value increases as borrowers pay interest.
- TVL is not fully withdrawable. Earn tracks available liquidity and uses it when selecting and exiting vaults.
- Token rewards are separate. MORPHO and partner-token rewards are not included in the APY displayed by Earn.
How Earn selects vaults
A Morpho vault must meet the following platform requirements before Earn can add it to the approved vault set:
| Requirement | Earn behavior |
|---|---|
| Deposit asset | The vault must accept USDC. |
| Total value locked | The vault must have at least $5,000 in TVL. Individual strategies can set a higher minimum vault size. |
| Approved vault set | The vault must be reviewed and added to Earn’s on-chain approved set. |
The $5,000 threshold is the platform eligibility floor. During strategy creation, Minimum vault size can restrict the strategy to larger vaults.
TVL means total value locked: the total value currently held by the vault. Platform eligibility determines which vaults Earn can support, while your strategy settings narrow that set further.
Why a Morpho vault may not be selectable
A vault shown on Morpho may be unavailable to a strategy for any of these documented reasons:
- Not in the approved set — Earn has not yet added the vault to its on-chain approved set.
- Below Minimum vault size — The vault's TVL is lower than the threshold configured for the strategy.
- Below Minimum withdrawable liquidity — The vault does not have enough USDC available to meet the strategy's liquidity requirement.
- Hidden from the strategy — The strategy owner has explicitly excluded the vault.
- Deposit cap reached — The vault has reached the maximum amount it can accept.
- No APY data — Earn does not yet have the APY information needed to evaluate the vault.
Approved set and wallet approval
Being in Earn's approved set and being approved by your wallet are separate:
| Approval | What it means |
|---|---|
| Earn's approved vault set | The vault has passed the platform requirements and is available for eligible strategies. |
| Wallet approval | You have granted the one-time vault share allowance required before Earn can use that vault for your strategy. |
A vault can be part of Earn's approved set while still requiring approval from your wallet. See Approvals and signatures for how these allowances work.
Understand withdrawable liquidity
Vaults lend most deposited USDC to borrowers, so the full TVL is not necessarily available for immediate withdrawal. Earn displays the available amount as withdrawable liquidity and shows its percentage of TVL with a colored Liquid % tag:
| Liquid % color | Withdrawable liquidity as a share of TVL |
|---|---|
| Red | Below 3% |
| Orange | 3% to below 10% |
| Green | 10% or above |
Liquidity affects where Earn can route funds. A strategy sets a Minimum withdrawable liquidity floor. Earn enters vaults that hold the required multiple above that floor and exits a held vault if its liquidity falls below the floor. See Rebalancing.
The Vaults page lists approved vaults with their APY, TVL, liquidity, and approval status. Open a vault to view its APY and withdrawable liquidity over the previous 24 hours.
How share price produces yield
The vault share price is calculated as:
Share price = USDC held by the vault ÷ total shares issuedThe USDC held by the vault includes funds on loan and reserves. As borrowers pay interest, the vault's USDC balance grows while the number of shares remains unchanged. Each share therefore represents more USDC over time.
Your yield appears as a higher value for the shares already in your wallet rather than as additional vault shares.
The share price rises during normal operation but can fall after a loss in a Morpho market. Holding vault shares exposes you to the associated smart-contract and vault-curation risks.
Understand token rewards
MORPHO and partner-token rewards are not included in the APY displayed by Earn. These rewards do not increase the vault share price, which is the value Earn uses to calculate and compare vault APY.
Vault shares are held by your wallet, so rewards accrue to that wallet. Claim them through Morpho's rewards interface using the same wallet.
Earn ranks vaults using share-price APY, keeping its vault comparisons consistent. See Rebalancing for how Earn uses that APY.