Aave charges ~4.4% (variable) APR with $0 origination fees using smart contract (wrapped btc via custodial bridge). Morpho charges ~4.3% (variable) APR with $0 origination fees using smart contract (wrapped btc via custodial bridge). See the full breakdown of rates, thresholds, and custody risk below.
Rates verified 2026-06-09
Morpho advertises a lower headline rate at ~4.3% (variable) compared to Aave's ~4.4% (variable). On a $1M loan held for 12 months, Morpho saves $1,000 in total first-year cost (interest plus origination fees).
Total year-1 cost includes both annualized interest and any origination fees charged upfront.
| Loan Size | Aave APR | Morpho APR | Aave Total Year-1 Cost | Morpho Total Year-1 Cost | Savings |
|---|---|---|---|---|---|
| $100,000 | 4.4% | 4.3% | $4,400 | $4,300 | $100 with Morpho |
| $250,000 | 4.4% | 4.3% | $11,000 | $10,750 | $250 with Morpho |
| $500,000 | 4.4% | 4.3% | $22,000 | $21,500 | $500 with Morpho |
| $1M | 4.4% | 4.3% | $44,000 | $43,000 | $1,000 with Morpho |
| $5M | 4.4% | 4.3% | $220,000 | $215,000 | $5,000 with Morpho |
Total year-1 cost includes annualized interest plus origination fees. Aave rates are variable; the table uses a representative recent rate. Morpho rates are variable; the table uses a representative recent rate. Rates sourced from each lender's public rate pages as of 2026-06-09.
Both Aave and Morpho use similar custody approaches: smart contract (wrapped btc via custodial bridge) and smart contract (wrapped btc via custodial bridge) respectively. Aave holds collateral in audited smart contracts rather than with a single lender, but borrowing requires wrapped Bitcoin (WBTC or cbBTC) — your underlying BTC is held by the wrapper's custodian (BitGo/BiT Global for WBTC, Coinbase for cbBTC), reintroducing custodial bridge risk. Smart-contract and oracle risk also apply. Morpho holds collateral in audited smart contracts rather than with a single lender, but borrowing requires wrapped Bitcoin (WBTC or cbBTC) — your underlying BTC is held by the wrapper's custodian (BitGo/BiT Global for WBTC, Coinbase for cbBTC), reintroducing custodial bridge risk. Smart-contract and oracle risk also apply.
Aave has no margin-call mechanism: positions become liquidatable automatically the moment LTV crosses 78%, with no warning threshold or response window. Morpho has no margin-call mechanism: positions become liquidatable automatically the moment LTV crosses 86%, with no warning threshold or response window.
| Threshold | Aave | Morpho |
|---|---|---|
| Max Starting LTV | 73% | 86% |
| Margin Call | None | None |
| Margin Call Window | None — automated liquidation | None — automated liquidation |
| Liquidation | 78% LTV | 86% LTV |
Aave: 5.0 percentage point buffer between starting LTV (73%) and liquidation (78%). Morpho: 0.0 percentage point buffer between starting LTV (86%) and liquidation (86%). Aave provides a wider safety margin.
Choosing between Aave and Morpho requires evaluating total cost, custody risk, and which platform aligns with your borrowing profile. Aave uses smart contract (wrapped btc via custodial bridge) with ~4.4% (variable) APR, while Morpho uses smart contract (wrapped btc via custodial bridge) with ~4.3% (variable) APR.
On a $250,000 loan, Morpho costs $10,750 in the first year versus $11,000 at Aave, a difference of $250. Morpho charges no origination fee, so the only cost is interest.
Both platforms use similar custody approaches. Aave operates via smart contract (wrapped btc via custodial bridge), and Morpho uses smart contract (wrapped btc via custodial bridge). Neither platform rehypothecates borrower collateral.
Aave is the better fit for borrowers who need smaller loans or instant access. Morpho is the better fit for borrowers who need smaller loans or more flexible access.
Key details to be aware of: Aave: DeFi money market — rates are variable and utilization-driven: USDC borrow against WBTC/cbBTC has ranged ~3.5-5. Morpho: DeFi lending protocol — variable utilization-driven rates: WBTC/cbBTC-USDC markets have run ~3-5% in recent months. Single 86% LLTV parameter: you can borrow right up to it, but there is no margin call and zero buffer — positions are liquidatable the instant LTV exceeds 86%, and a liquidator may close up to 100% of the position (~4.
Morpho is cheaper. On a $500,000 loan held for 12 months, Aave costs $22,000 (4.4% APR) while Morpho costs $21,500 (4.3% APR). That is a $500 difference in the first year.
Aave uses smart contract (wrapped btc via custodial bridge). Morpho uses smart contract (wrapped btc via custodial bridge). Both platforms present similar custody risk profiles.
Aave has no minimum loan amount. Morpho has no minimum. Both have the same minimum.
Aave has no margin call — positions are liquidated automatically the moment LTV crosses 78%. Morpho has no margin call — positions are liquidated automatically the moment LTV crosses 86%. Starting from a 50% LTV, Aave provides a 28-point buffer before liquidation, while Morpho provides a 36-point buffer.
It depends on your priorities. Aave (~4.4% (variable) APR, smart contract (wrapped btc via custodial bridge), no minimum) is better for borrowers who value smart contract (wrapped btc via custodial bridge) and need smaller loan access. Morpho (~4.3% (variable) APR, smart contract (wrapped btc via custodial bridge), no minimum) is better for borrowers who value smart contract (wrapped btc via custodial bridge) and need smaller loan access. Use the rate table and cost comparison above to model your specific scenario.
Lygos offers 10% APR, $0 origination fees, and DLC-secured collateral where rehypothecation is cryptographically impossible.