The Good Tech Companies - Oku Morpho Etherlink Launch: How a 3,300% TVL Surge Changes Tezos DeFi Forever

Episode Date: October 28, 2025

This story was originally published on HackerNoon at: https://hackernoon.com/oku-morpho-etherlink-launch-how-a-3300percent-tvl-surge-changes-tezos-defi-forever. Oku deploys Morpho's $10B lending protocol on Etherlink. Can Tezos L2 compete with Ethereum DeFi through MEV Capital's USDC vault? Check more stories related to web3 at: https://hackernoon.com/c/web3. You can also check exclusive content about #web3, #good-company, #blockchain, #crypto, #tezos, #tezos-news, #etherlink, #cryptocurrency, and more. This story was written by: @ishanpandey. Learn more about this writer by checking @ishanpandey's about page, and for more stories, please visit hackernoon.com. Oku deploys Morpho's $10B lending protocol on Etherlink. Can Tezos L2 compete with Ethereum DeFi through MEV Capital's USDC vault?

This audio is presented by Hacker Noon, where anyone can learn anything about any technology. Oku-Morpho Etherlink launch, how a 3,300% TVL surge changes Tizos Defi forever by Ashan Pondi. Greater than what happens when a protocol handling billions meets a network measured in greater than millions. The question matters because Etherlink, the Tizos Layer 2 blockchain, now hosts one of the fastest growing lending protocols in decentralized finance. On October 28, 2025, Oku, a non-custodial aggregator developed by GFX Labs, integrated Morpho protocol on Etherlink. This deployment gives TISO's users access to lending and borrowing capabilities through a platform

that competes directly with Aves 66. 7% market share in Defy Lending. Morpho Protocol operates differently from traditional pool-based lending systems, where platforms like Ave aggregate all lenders and borrowers into shared pools, Morpho matches lenders directly with borrowers when possible, then falls back to pool-based lending only when needed. This peer-to-peer matching reduces the spread between what lenders earn and what borrowers pay. The protocol surpassed $10 billion in deposits in August 2025, with $6, $7 billion in active loans across Ethereum, Arbitrum, and other chains. The integration arrives as defy lending reaches historic highs.

In June 2025, the sector hit $55, $7 billion in TVL, surpassing peaks from 2021, 2022, and 2024. Morpho contributed significantly to this growth, with its TVL increasing 38% since January 2025. How does Morpho lending work for users unfamiliar with peer-to-peer protocols? Traditional lending platforms work like banks holding deposits in a vault. Everyone puts money in the same place, and borrowers take from that shared pool. Interest rates adjust based on how much of the pool gets borrowed. When more people borrow, rates rise to attract more depositors. When fewer people borrow, rates fall.

Morpho changes this model. Think of it as a marketplace that tries to connect individual lenders directly with individual borrowers before using the pool method. If you want to lend 1,000 USDC and someone wants to borrow exactly that amount at similar terms, Morpho connects you directly. This direct connection means better rates for both parties because the protocol eliminates the middleman spread that traditional pools create. When no direct match exists, Morpho uses the pool system as a backup. This hybrid approach gives users the liquidity guarantees of pool-based systems

while cap-turing the efficiency gains of peer-to-peer matching when possible. The protocol handles all the matching logic automatically through smart contracts, so users simply deposit or borrow as they would on any other platform. Collateral requirements remain consistent with defy standards. Borrowers must deposit assets worth 125% to 200% of their loan value, depending on the specific market and asset pair. If the value of their collateral drops below a threshold, the protocol automatically liquidates enough collateral to repay the loan and protect lenders. Why did Oku and MEV Capital choose Etherlink for this deployment? Etherlink offers transaction confirmations

in under 500 milliseconds with fees that typically cost around $0.001 per transaction, the Layer 2 network operates is an EVM-compatible blockchain powered by Tizo's smart roll-ups technology. Unlike most Layer 2 solutions that build separate governance structures, Etherlink inherits TISO's Layer 1 security model and on-chain governance system directly. The network's performance characteristics attracted multiple Defi protocols throughout 2025. The The Calypso upgrade in March 2025 delivered up to 30x faster smart contract storage speeds and reduced bridging times from 15 days to under one minute. These improvements supported rapid ecosystem growth.

Etherlink's TVL trajectory tells the growth story. The network held $1.4 million when it exited beta in February 2025. By April, the Apple Farm Incentive Program pushed TVL above $40 million. The figure reached $47, $7 million by August 2025, representing a 3,300% increase in six months. Dan Zionts, business development lead at Oku, said in a statement that Morpho on Etherlink represents a turning point for lending on the network. Greater than, users can now control their assets or borrow at competitive rates, all in one greater than place. It's simple, efficient, and accessible. The platform's architecture matters for lending protocols, smart contract operations that require frequent state updates, such as interest rate calculations

and collateral checks, benefit from faster storage access. Morphos lending markets perform these operations constantly as loans accrue interest and collateral values fluctuate. The 30x improvement in storage speed directly impacts the efficiency of these core functions. What role does MEV Capital play in this ecosystem? MEV Capital operates as a digital asset management firm focused on DFIS strategies. Founded in 2021 by Laurent Borkwin and Gittes Trialikowskis, the firm Pro Vitas Institutional Grade Risk Management for on-chain lending and yield generation. The company runs strategies primarily exposed to stable coins and serves crypto-native entities, high net worth individuals, and institutional investors.

Borkwin spent several years at Societe General Corporate and Investment Banking before co-founding MEV Capital. The firm built its reputation through sophisticated hedging strategies, including options-based approaches to prevent impermanent loss for uniswap V3 liquidity providers. The Etherlink vault represents MEV Capital's first deployment on the Tezocco system. This vault marks MEV Capital's strategic entry into the Tezocco system, where Etherlink's performance characteristics enable the institutional lending infrastructure we've pioneered on other chains, said Laurent Borkwin, CEO at MEV Capital. Vault curation in Morphos system means selecting which assets can be used ascalateral, setting loan to value ratios, and monitoring risk continuously. Curators earn fees from

vault activity while taking responsibility for the safety of depositor funds. MEV Capital's role involves analyzing market conditions, adjusting parameters as needed, and ensuring the vault maintains appropriate risk levels. The firm manages the vault's exposure to three yield-bearing tokens from Midas, MMEV, M basis, and MT bill. These tokens represent different strategies with varying risk profiles and yield potential. What are Midas tokens and how do they generate yield? Midas operates as a tokenization platform that converts financial strategies into ERC20 tokens called liquid yield tokens. Each token tracks the performance of a specific underlying strategy, with the token's value fluctuating based on the strategy's returns rather than maintaining

a $1 peg like traditional stable coins. The three tokens in MEV capital's vaults serve different purposes. M-T bill tracks short-term U.S. Treasury bills and currently yields around 4.06% APY. The token pro-Vita's exposure to government-backed securities through a structure that holds assets in a bankruptcy remote special purpose vehicle. BlackRock's BUIDL fund serves as the underlying collateral. M-BASIS implements a basis trade strategy, also called a carry trade. This approach capitalizes on price differences between spot and futures markets for Bitcoin, Ethereum, and select altcoins. When futures prices exceed spot prices, the strategy captures the spread. The token yielded between 20% and 40% during favorable market

conditions as of October 2024, though returns vary with market dynamics. MMEV represents market neutral defy yield strategies managed by MEV capital itself. The token Reflects the firm's proprietary approaches to capturing value from various defy protocols. Current yields reach 12, 0.1% APY plus additional rewards, making it the highest yielding option among the three tokens in the vault. All three tokens received regulatory approval in Liechtenstein and carry passporting rights across Germany and Europe. Midas removed the $100,000 minimum investment requirement in October 2024, making the tokens accessible to retail investors across Europe. The platform reached $100 million in TVL by May 2025. The vault structure enables users

to deposit USDC and receive interest from lending it against these three yield-bearing assets as collateral. Borrowers can lock up their Midas tokens and borrow USDC at competitive rates, maintaining exposure to the token yields while accessing liquid capital. How does Oku fit into this lending infrastructure? Oku serves as the front-end interface connecting users to both Morpho's lending markets and Uniswap V3's trading pools. Developed by GFX Labs, the platform received a $1.6 million grant from the Uniswap Foundation in 2022 to build an interface that brings centralized exchange features to decentralized protocols. The platform operates across 35 plus chains with zero front-end fees. Users can execute swaps through 12 different routing systems and bridge assets through 14 bridge

protocols, all from a single interface. Oku's routing engine scans available liquidity sources to find optimal prices for each transaction. For the Morpho integration specifically, Oku provides live market analytics, real-time interest rate tracking, and streamlined collateral management tools. Users can monitor their lending positions, track accumulated interest, and adjust their collateral ratios without switching between multiple platforms. The platform launched on Etherlink in June 2025, bringing Uniswap V3 functionality to the Tizos Layer 2 network. The Morpho deployment extends Okus capabilities beyond trading into lending and borrowing. Anthony Hayet, head of Defy Adoption at Nomadic Labs, connected the integration to broader ecosystem goals.

The deployment of Morpho on Etherlink marks a major milestone for the Tezos's defy ecosystem. By combining Etherlink's performance with Morpho's leading franchise, we're in in in airstlein. enabling a new generation of efficient, transparent, and user-centric lending markets, paving the way for real-world acid composability, Hayett said. Greater than, we're very proud to kick off this new integration with a Tier 1 curator like Greater Than MEV Capital, which highlights the growing maturity and sophistication of the greater than TISO's defy ecosystem. What does this mean for the competitive Defy landscape? The integration positions Etherlink as a viable alternative for users seeking lower

transaction costs without sacrificing security or decentralization. Morpho's deployment across multiple chains demonstrates the protocol's strategy of meeting users where they are rather than forcing them onto a single network. Defy lending's total addressable market continues expanding. The sector holds 35% of all Defi TVL, with 526 active lending protocols and at least 170 maintaining over $1 million in TVL as of June 2025. Competition remains intense, with Ave maintaining market leadership while morpho, compound, and others fight for share. Etherlink's growth trajectory differs from other layer two networks primarily in its timing and underlying technology. While networks like Arbitrum and optimism built large ecosystems before

Ethereum's layer two scaling became crowded, Etherlink enters a market where dozens of layer two solutions compete for users and liquidity. The network's connection to Tizos provides both advantages and constraints. Tizos offers a proven on-chain government governance system and energy-efficient consensus mechanism that Etherlink inherits. However, the TISO's ecosystem remains smaller thin ethereum's in terms of developer activity, tooling maturity, and user base. Real-world acid integration represents a potential differentiator. The combination of Morphos lending infrastructure, Midas's tokenized products, and Etherlink's

performance characteristics creates a stack optimized for regulatory compliant, composable yield products. products like MMEV and MRE7 YIELD finally make advanced yield farming strategies accessible to institutional investors, according to a statement from nomadic labs. We view them as one important step toward bringing wholesale finance fully on chain. What challenges could limit adoption network effects favor established platforms. Aves $26.09 billion TVL in years of operation give it advantages in brand recognition, audited codebase, and community. trust. Morphos $6.7 billion TVL, while substantial, represents only about one-fourth of Aves size. Etherlink's $47.7 million TVL sits several orders of magnitude below these figures.

Liquidity fragmentation poses real problems for defy users. When capital spreads across dozens of chains and hundreds of protocols, each individual market becomes thinner. Thinner markets mean wider spreads between bid and ask prices, making trades more expensive. They also mean higher slippage on large transactions, as moving meaningful amounts of capital impacts prices more dramatically in smaller markets. The vault curated by MEV Capital starts with three specific collateral assets. This limited selection contrasts with larger lending platforms that support dozens of assets and hundreds of markets. Users holding other yield-bearing tokens are wanting to borrow different assets must look elsewhere. Market depth for USDC lending against Midas

tokens will depend entirely on how much capital MEV capital attracts to the vault and how many borrowers want this specific combination of assets. Smart contract risk remains constant across all defy platforms. Morpho has undergone over 25 audits from firms including Open Zeppelin, Spearbit, and Cantina. However, each new deployment creates new potential attack surfaces, particularly when integrating with other protocols and bridging across chains. The February 2025 launch of Etherlink means less battle testing compared to networks that have operated for years. Regulatory uncertainty affects real-world asset tokenization projects particularly acutely. While Midas secured approvals in Liechtenstein with passporting rights across Europe, regulations continue evolving.

Changes in regulatory frameworks could impact the tokens availability, structure, or yield generation methods. The tokens remain unavailable to U.S. investors, cutting off access to one of the largest markets for defy products. How does this integration change the calculus for Tizos developers? The deployment demonstrates that Etherlink can support complex Defy protocols without modification. Morphos codebase, originally written for Ethereum, runs in Etherlink without changes because of the network's EVM compatibility. This compatibility matters for developers evaluating which layer two networks TOTARG. Building on Etherlink means accessing the Tizos community while using familiar

Ethereum tools. Developers can use hardhat, foundry, Metamask, and other standard EVM tooling. At the same time, they gain access to TZOS's on-chain governance system in the network's established user base. The combination of Oku, Morpho, and Midas creates a template for other projects. A Defy protocol can deploy on Etherlink, integrate with existing interfaces like Oku, and offer products that combine on-chain and real-world yield sources. This stack reduces the infrastructure burden for new projects while giving them access to established liquidity and user bases. Etherlink's Teslink runtime, expected to launch alongside the EVM environment, will enable developers to build using TISO's native languages like Michelson, SmartPY, and Ligo while still connecting to Etherlink's defy

protocols. This still runtime approach could attract developers who prefer Tizos's tooling but need access to to EVM liquidity. What comes next for users in the broader ecosystem? Users can access the integration immediately by visiting Oku, trade and connecting their wallets. The platform supports standard Ethereum wallets like Meta Mask, making the onboarding process familiar to anyone who has used Defy applications before. The initial Vault provides a foundation for expansion. MEV Capital's success or failure curating this first market will influence whether other VALP curators choose to deploy on Etherlink. More curators mean more collateral options, which means more reasons for users to move liquidity to the network. Competition will intensify

as other layer two networks court similar integrations. Every major Defy protocol now faces decisions about which chains to support, and liquidity remains fragmented across dozens of networks. Etherlink competes not just with other TISO's related projects but with Arbitrum, optimism, base, ZKSYNC, and many others for developer attention and user capital. The success of this integration could accelerate Etherlink's growth beyond the incentive programs that initially drove adoption. If users find genuine value in the combination of fast transactions, low fees, and access to institutional grade yield products, organic growth could sustain momentum after rewards programs end. The network's TVL growth from $1,4 million to $47.

7 million in six months suggests demand exists, but sustainability remains improved. Final thoughts and analysis, the Oku-Morpho integration on Etherlink represents more than a technical deployment. It tests whether a layer 2 network can build meaningful defy infrastructure fast enough to compete with established players who have years of head start. Three factors will determine success. First, whether MEV capital can attract sufficient capital to make the lending markets liquid enough for practical use. Second, whether Etherlink can maintain its growth trajectory after incentive programs wind down. Third, whether users perceive enough value in the combination of low fees, fast transactions, and yield opportunities to justify the

friction of moving capital to a newer, less proven network. The integration's timing matters. Defy Lending reached historic highs in 2025, with the sector hitting $55.7 billion in TVL. This growth indicates rising institutional and retail interest in on-chain lending products. Etherlink enters this expanding market with infrastructure advantages that could attract users if the network executes well. Morpho's multi-chain strategy validates the approach of meeting users across multiple networks rather than forcing them onto a single chain. The protocol's $10 billion in deposits across various chains proves that users will adopt lending platforms regardless of the underlying network, as long as the economics work and the security seems sound. The real-world asset component adds a dimension that pure defy protocols lack. By enabling lending against tokenized treasury bills,

basis trade strategies, and institutional yield products, the integration bridges traditional and decentralized finance in ways that could appeal to a broader user-based thanypical defy offerings. Whether this integration marks the beginning of sustainable growth for TISO's defy or remains a promising experiment in an oversaturated layer 2 landscape depends on execution over the coming months. The infrastructure exists. The protocols work. The challenge lies in attracting and retaining enough users and capital to reach critical mass in an environment where countless alternatives scompete for attention. For now, Tizos has its shot at defy relevance through Etherlink. The next chapter depends on whether users choose speed and low fees over

established networks with deeper liquidity and longer track records. Markets will decide, ask the always do in decentralized finance. Don't forget to like and share the story. This author is an independent contributor publishing via our business blogging program. Hacker Noon has reviewed the report for quality, but the claims here and belong to the author. Hashtag D.O thank you for listening to this Hackernoon story, read by artificial intelligence. Visit Hackernoon.com to read, write, learn and publish. Thank you.