Merlin Egalite confirms that recent liquidity issues in Morpho affected only a few vaults and were promptly resolved through automatic loan rate adjustments during periods of market stress.
Morpho co-founder Merlin Egalite responded to concerns about liquidity shortages, explaining that they occur during market stress when utilization rates reach maximum levels. To address this, the protocol automatically raises loan interest rates, encouraging liquidity to return. Egalite stated the system is operating normally, with only 3–4 of Morpho’s 320 vaults briefly impacted in the latest incident.