How matching & rates work $MORPHO ๐๐ฅ
๐๐ Two layers of rates: the base pool rate, and (B) the P2P rate that $MORPHO computes for matched participants. ๐ฐ๐พ Morpho sets P2P rates so matched lenders get a share of the spread ๐โจ and matched borrowers pay less than base pool borrow APR. ๐โก The Yellow Paper formalises this: matching reduces the spread between โฅ๏ธ๐ฐ supply/borrow while preserving pool invariants (liquidity, liquidations). ๐๐
๐โจ Utilization & matching priority: ๐โก Morpho maintains internal accounting of available P2P supply and demand per market.
๐โจ When utilization is high, ๐ฅ๐ more matching occurs and P2P rates deviate more from base pool rates. โฅ๏ธ๐ฐ When utilization is low, transactions route to the pool and P2P benefits shrink. ๐๐