This project contains scripts for interacting with the Morpho Protocol, including vault creation, market setup, and various operations to setup.
You can find the deployed Morpho addresses here
Once you download the repo, make sure to install all the packages
yarn install
Make sure to make a copy of the .env.example and lable it .env as this will be used for the rest of the repo examples.
To support all networks that may not be supported by viem by default, in the scripts/config/config.ts file. You can manually add your network
Follow the scripts in the order below:
For testing purposes, we have the option to deploy your own tokens to setup markets and vaults on a testnet. If you are doing this on mainnet, skip Step 0
Deploy your ERC-20 tokens that will be used as assets in the protocol.
Contracts:
- FUSDC.sol - Mock USDC token
- FWETH.sol - Mock WETH token
- ETHMockOracle.sol - Mock ETH price oracle
- USDCMockOracle.sol - Mock USDC price oracle
yarn deploy
Creates a new Morpho vault based on the VAULT_TOKEN_ADDRESS that will be used to create liquidity for the Markets get assigned to.
yarn createVault
What it does:
Deploys a new Morpho vault contract Sets initial vault parameters Returns vault address for subsequent operations
This script will generate your specified oracle feeds. These price feeds will have OEV enabled, so if liquidations occur, the Market will generate income if the liquidator uses OEV to liquidate the unhealthy position.
In the .env file, set a value for the price feed of choice. Ex: ETH/USD in DAPI_NAME and the name of your Market in DAPP_ALIAS
Ex:
- DAPI_NAME="ETH/USD"
- DAPP_ALIAS="Billy ETH USDC Market"
yarn dappSpecificProxy
Creates the oracle adaptor for you choice of oracle for both the Collateral Token and the Loan Token for your Market. While most oracles are compatible with this, I recommend using Api3 oracles as they have OEV built into the oracle system for additional revenue options for the Market.
For Markets using a ERC4626, you must set a BASE_VAULT value in your .env. If you are using a standard token ERC20 (eg. ETH/USD), you will leave at 0x0 as default.
*note - The salt allows different predetermined addresses and allows multiple oracle adaptors that have the same assets deployed by different curators.
let factoryAddress = process.env.ORACLE_FACTORY_ADDRESS || "";
let loanTokenAddress = process.env.LOANTOKEN_ADDRESS || "";
let collateralTokenAddress = process.env.COLLATERALTOKEN_ADDRESS || "";
let baseVault = process.env.BASE_VAULT || "0x0000000000000000000000000000000000000000";
let baseFeed1 = process.env.COLLATERAL_ORACLE_ADDRESS_F1 || "";
let baseFeed2 = process.env.COLLATERAL_ORACLE_ADDRESS_F2 || "0x0000000000000000000000000000000000000000";
let quoteFeed1 = process.env.LOAN_ORACLE_ADDRESS_F1 || "";
let quoteFeed2 = process.env.LOAN_ORACLE_ADDRESS_F2 || "0x0000000000000000000000000000000000000000";
let quoteVault = process.env.QUOTE_VAULT || "0x0000000000000000000000000000000000000000";
let baseVaultConversionSample = process.env.BASE_VAULT_CONVERSION_SAMPLE || "1";
let quoteVaultConversionSample = process.env.QUOTE_VAULT_CONVERSION_SAMPLE || "1";
let salt = process.env.SALT || "0x0000000000000000000000000000000000000000000000000000000000000000";
yarn createMorphoOracle
What it does:
Deploys oracle contracts for asset price feeds Configures price sources and validation parameters Essential for market risk assessment
Creates lending/borrowing market for specific asset pairs. After deploying your Oracle adaptor, you will update the MORPHO_ORACLE_ADDRESS in the .env file. You must also set your Liquidation Loan to Value amount. As a curator, your analysis of a safe LTV ratio determines the confidence of your market. Set, your value in the LLTV in the .env
yarn createMarket
What it does:
Creates new lending markets with specified collateral and loan tokens Sets market parameters (LTV, liquidation thresholds, etc.) Links markets to appropriate oracles
Sets up vault governance and operational parameters. This script sets, the addresses for each role for the vault. Such as what markets it will associate itself to, supply caps, etc. You can read more about each role here
Set your addresses in the .env file and if you would like to override the default FEE_AMOUNT, add it with a value to your .env file
const CURATOR_ADDRESS = process.env.CURATOR_ADDRESS || "";
const ALLOCATOR_ADDRESS = process.env.ALLOCATOR_ADDRESS || "";
const GUARDIAN_ADDRESS = process.env.GUARDIAN_ADDRESS || "";
const FEE_RECIPIENT_ADDRESS = process.env.FEE_RECIPIENT_ADDRESS || "";
const SKIM_RECIPIENT_ADDRESS = process.env.SKIM_RECIPIENT_ADDRESS || "";
const FEE_AMOUNT = process.env.FEE_AMOUNT || 10000000000000000n;
yarn configureVault
What it does:
- Sets the Curator (manages market additions)
- Sets the Allocator (manages capital allocation)
- Sets the Guardian (emergency controls)
- Sets Fee recipient (receives protocol fees)
- Sets Skim recipient (receives excess tokens)
This adds a market to your vault while also proposing the supply cap. Meaning how much of the vault's liquidity would be allowed to enter this market. This is based on the risk analysis of the curator.
By default, the supply cap is set to 1,000,000. To override this, set a SUPPLY_CAP variable in your .env and set a value to it
yarn addMarket
What it does:
Proposes adding a specific market to the vault Sets initial supply cap proposals Requires curator approval in next step
The script will check for any pending approvals for the vault. The Curator approves and finalizes the supply caps for markets.
yarn addMarketCap
What it does:
Curator accepts/approves the proposed supply caps Finalizes market addition to vault Enables the market for deposits
Configures the order in which markets receive deposits. Because a vault can be connected to multiple markets (to maximize different vault risk/rewards), we as the Curator must see the order of which markets the liquidity of our vaults fill first and in what order.
yarn setMarketSupply
What it does:
Sets the priority order for depositing funds into markets Determines capital allocation strategy Higher priority markets receive funds first
Configures the order in which markets are withdrawn from.
yarn updateMarketWithdraw
What it does:
Sets the priority order for withdrawing funds from markets Ensures liquidity management during withdrawals Higher priority markets are withdrawn from first
Deposit assets into the vault to earn yield.
Now that we have our Vault and Single Market Setup, we can now deposit our assets into the Vault to earn yield. The Vault will supply the Market with liquidity to be available to be lent out in the Market.
By default/demo, the deposit is set to 10 tokens, to override this set a Value to DEPOSIT_AMOUNT in your .env file
yarn depositToVault
What it does:
Deposits user assets into the vault Receives vault shares representing ownership Assets are automatically allocated based on supply queue
Supply collateral directly to a specific market for borrowing. We want to test our Market to make sure it is working correctly, so we will deposit our Collateral token to then we can test our borrow capabilities.
By default, it will deposit 10,000 tokens to the market as collateral. To override this, set COLLATERAL_AMOUNT with a value in your .env file
yarn supplyCollateralToMarket
What it does:
Supplies collateral tokens to a specific market Enables borrowing against the collateral Increases user's borrowing capacity
Borrow assets against supplied collateral. By default, the script will borrow 0.5 of the Loan token. To override this, set BORROW_AMOUNT with the amount you want to borrow in the .env file.
yarn borrowFromMarket
What it does:
Borrows assets from a market using supplied collateral Must maintain healthy collateralization ratio Accrues interest over time
Repay borrowed amounts to reduce debt position. By default, it will repay 0.005 of the debt token, to override this set REPAY_AMOUNT and provide the value you want to repay in the .env file
yarn repayDebt
What it does:
Repays borrowed assets plus accrued interest Reduces debt position Frees up collateral for withdrawal
Withdraw assets from the vault.
yarn withdrawFromVault
What it does:
Burns vault shares to withdraw underlying assets Assets are withdrawn based on withdraw queue priority May be subject to withdrawal fees or delays
After deploying the oracle adaptor, you can read the rate and oracle values directly from the adaptor to verify all is working correctly.
yarn readOracle
Displays current vault information and status
yarn vault
Displays the current market information and status
yarn market
Bypasses the vault deposit and earns yield directly on the specific market
yarn supplyLoanTokensToMarket
Withdraws the tokens supplied to the market for lending
yarn withdrawLoanTokensFromMarket
This requires you to deploy your own smart contract
yarn deployFlashloan
Once you have update the .env file with your deployed contract
yarn flashloan
Call the function to liquidate a specific wallet Health factor must be below 1.0
yarn liquidate