Uniswap launches 'Earn' with Morpho to let users earn yield on idle crypto assets

Uniswap, the largest decentralized crypto exchange by trading volume, is expanding beyond trading with the launch of "Earn," a new product built with Morpho, the second-largest decentralized lending protocol.

The Uniswap Earn product lets users deposit USDC, USDT, and ether into three Gauntlet-curated Morpho vaults, where the assets are lent to borrowers through Morpho's lending markets. The interest paid by borrowers becomes the yield earned by depositors. Users keep custody of their assets and can withdraw them at any time, Uniswap said.

"Uniswap was built to give people open, direct access to onchain markets and Earn is a natural next step," Anthony Beshay, staff product manager at Uniswap, said in a statement. "It gives users a simple way to put their assets to work without needing to manage concentrated liquidity positions."

Asked how Earn differs from Uniswap's DualPool product, developed with Spark (the DeFi arm of Sky, formerly MakerDAO), a Uniswap spokesperson told The Block that Earn is designed for users who want to earn yield through lending, while DualPool is intended for users who want to both provide liquidity and lend their assets.

The spokesperson declined to comment on how the Morpho integration benefits Uniswap from a revenue perspective.

The launch comes shortly after SEC Commissioner Hester Peirce said crypto vaults and onchain lending strategies may already fall within existing federal securities laws, depending on how they are structured. Asked about those comments, the Uniswap spokesperson said, "We're confident that we are acting in compliance with all applicable laws."

Meanwhile, Morpho has increasingly become lending infrastructure for crypto companies. Coinbase, Robinhood, Bitwise Asset Management and Société Générale have all integrated or built products on the protocol.

"The value of Morpho comes from its network effects," Morpho co-founder and CEO Paul Frambot told The Block. "Every integration deepens this with increased liquidity and therefore making Morpho valuable to everyone using it."

As more applications bring deposits to Morpho, lending markets become deeper, making the protocol more attractive to future partners while also increasing potential protocol revenue if the DAO later activates the fee switch, Frambot said.

Uniswap's (UNI) token is currently trading at $4.32, up about 1% over the past 24 hours. The token currently has a market capitalization of $2.7 billion and ranks as the 34th-largest cryptocurrency, according to The Block's UNI price page.

The (MORPHO) token is currently trading at around $1.95, down 1.8% over the past 24 hours. The token currently has a market capitalization of $1.3 billion and ranks as the 57th-largest cryptocurrency, according to The Block's MORPHO price page.