# Morpho

<table data-card-size="large" data-view="cards"><thead><tr><th></th><th></th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td><strong>KPK USDC Prime</strong></td><td>Ethereum</td><td><a href="morpho/ethereum/usdc-prime">usdc-prime</a></td></tr><tr><td><strong>KPK USDT Prime</strong></td><td>Ethereum</td><td></td></tr><tr><td><strong>KPK ETH Prime</strong></td><td>Ethereum</td><td><a href="morpho/ethereum/eth-prime">eth-prime</a></td></tr><tr><td><strong>KPK USDC Yield</strong></td><td>Ethereum</td><td><a href="morpho/ethereum/usdc-yield">usdc-yield</a></td></tr><tr><td><strong>KPK ETH Yield</strong></td><td>Ethereum</td><td><a href="morpho/ethereum/eth-yield">eth-yield</a></td></tr><tr><td><strong>KPK EURC Yield</strong></td><td>Ethereum</td><td><a href="morpho/ethereum/eurc-yield">eurc-yield</a></td></tr><tr><td><strong>KPK USDC Yield</strong></td><td>Arbitrum</td><td><a href="morpho/arbitrum/usdc-yield">usdc-yield</a></td></tr><tr><td><strong>Live metrics (Dune)</strong></td><td></td><td><a href="https://dune.com/kpk/kpk-morpho-vaults">https://dune.com/kpk/kpk-morpho-vaults</a></td></tr></tbody></table>

### Protocol overview

[Morpho](https://morpho.org/) is a lending environment enabling ERC-4626 vaults that accept a single deposit asset and allocate it across underlying isolated lending markets. Depositors supply liquidity and earn lending yield; curators decide allocation eligibility and set safeguards.

{% hint style="info" %}
**Vault architecture:** today, our Morpho v2 vaults deposit fully to their corresponding v1 vaults, which execute the allocations. The v2 layer adds function-specific timelocks and may add MORPHO rewards. See [Vault Architecture](#vault-architecture-v1-and-v2).
{% endhint %}

### Curator model

Morpho uses a curator model: curators decide which lending markets a vault can allocate to and set safeguards. KPK acts as curator for selected Morpho vaults, defining safe operating conditions, selecting eligible markets, and reallocating liquidity when needed.\
\
**KPK’s curation focuses on three areas:** market selection, operational scalability through automation, and bespoke market deployments (where needed). All decisions follow the [Risk Framework](https://docs.kpk.io/vaults/infrastructure/risk-framework), which governs eligibility criteria, risk-tiering, and monitoring cadence.<br>

1. **Market selection and withdrawal reliability**\
   KPK sets market eligibility, exposure limits, and liquidity buffers. Only markets that pass [due diligence](https://docs.kpk.io/vaults/infrastructure/risk-framework) are enabled. Each approved market receives a **risk tier** and a **per-market supply cap** to limit concentration. Vaults maintain idle buffers designed to support smooth withdrawals.<br>
2. <mark style="color:$primary;">**Real-time automation (agents) and monitoring**</mark>\ <mark style="color:$primary;">Vaults are monitored continuously by agents operated by KPK. They are deterministic programs that execute</mark> <mark style="color:$primary;">**whitelisted functions**</mark> <mark style="color:$primary;">through KPK’s</mark> [<mark style="color:$primary;">Permissions Layer</mark>](https://kpk.io/permissions-layer/)<mark style="color:$primary;">. Agents monitor utilisation, liquidity depth, APY shifts, oracle health, and price divergence versus reference venues. When conditions change, they can reduce or disable exposure to a market, increase idle funds, or rebalance across enabled markets within predefined limits.</mark>
   * <mark style="color:$primary;">**Rebalancing agent:**</mark> <mark style="color:$primary;">improves capital efficiency by reallocating across approved markets using a rules-based approach (e.g. tier- and cap-aware water-filling), subject to liquidity and safety checks.</mark>
   * <mark style="color:$primary;">**Exit agent:**</mark> <mark style="color:$primary;">responds to risk alerts (e.g. oracle staleness or divergence) within seconds by reducing or disabling exposure, increasing withdrawable liquidity, and prioritising safe exits within predefined limits.</mark>\
     \ <mark style="color:$primary;">This combination delivers fast incident response and steady, rules-driven allocation. For the technical design and allowed actions, see</mark> [<mark style="color:$primary;">Automation</mark>](https://docs.kpk.io/vaults/infrastructure/automation)<mark style="color:$primary;">.</mark><br>
3. **Custom market deployments**\
   Where needed, KPK works with counterparties (e.g. asset issuers or interested borrowers) to deploy bespoke markets and terms under the same risk framework.

### Vault architecture

Morpho enables KPK to run two complementary vault layers:

* **v1 vaults:** the canonical strategy vaults that hold assets and execute allocations across isolated Morpho v1 markets.
* **v2 vaults:** an extensible vault layer with expanded governance controls (including function-specific timelocks) and support for broader allocation targets via adapters. Depending on configured adapters, a v2 vault can allocate to:

  * the **corresponding v1 vault** (common today), and
  * **individual Morpho markets** (v1, and v2 when available), plus other approved targets where supported.

  This allows v2 vaults to evolve towards more advanced strategies over time, while keeping governance controls explicit.

{% hint style="info" %}
**Current deployment**: today, KPK v2 vaults allocate fully to their corresponding v1 vaults.\
**In short,** v1 executes allocations while v2 adds an extensible allocation layer and expanded governance controls.
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### Governance and control

Critical actions follow a layered process designed for transparency, security, and timely response.

{% tabs %}
{% tab title="Governance changes (timelocked)" %}
**v1 vault:** changes that can expand permissions or increase risk (e.g., role updates, enabling a new market, raising allocation ceilings, or changing risk parameters) execute via KPK multisigs and a **3-day timelock**. The Guardian can intervene during this window if required.

**v2 wrapper vault:** the Morpho v2 wrapper adds an extra governance layer with **function-specific timelocks**. See [Morpho v2 wrapper governance](#morpho-v2-wrapper-governance) for KPK’s standard 3/7/14-day schedule.
{% endtab %}

{% tab title="Operational changes (not timelocked)" %}
Operational actions within pre-approved bounds, such as `reallocate()` between enabled markets, increasing the idle buffer, or setting a market cap to zero, execute under scoped roles and are not timelocked, allowing agents to respond within seconds.
{% endtab %}
{% endtabs %}

**Key settings and roles**

The following roles and settings apply across all KPK vaults:

* **Owner and sentinel:** [Security Council Safe](https://app.safe.global/transactions/history?safe=eth:0x354C92aF243d53A24feb3dFF20372Af7b7c47478) (5/7)\
  `0x354C92aF243d53A24feb3dFF20372Af7b7c47478`
* **Curator and allocator:** Curator Safe, with a Permissions Layer for agents (2/4). Visit each vault page for the specific address.
* **Timelocks:**
  * **3 days:** add adapter; increase absolute or relative cap, set force deallocate penalty
  * **7 days:** remove adapter, update gates, increase timelock
  * **14 days:** adjust management or performance fees

KPK Morpho v2 vaults add function-specific timelocks for wrapper configuration (adapter, fee, and risk-parameter changes). They use the same controlling safes as their corresponding v1 vaults (which remain timelocked under v1 governance).

For detailed configuration, see [Morpho v2 Roles and Timelocks](https://docs.morpho.org/curate/concepts/roles/#morpho-vaults-v2-roles), the [Morpho Change Log](https://docs.kpk.io/vaults/vaults/morpho/change-log), and the individual vault pages. For protocol-level context on Morpho v2 versus v1, see Morpho [documentation](https://docs.morpho.org/learn/concepts/vault-v2/#key-feature-comparison-morpho-vaults-v1-vs-morpho-vaults-v2).

{% hint style="info" %}
**Allocator usage:** KPK does not use Morpho's public Allocator role, reducing the attack surface. Automation is instead scoped through KPK’s Permissions Layer and Morpho’s roles system.
{% endhint %}

### Vault configuration

Enabled markets, caps, risk tiers, oracles, allocation rules, and governance addresses are documented on each vault page and kept up to date in the [Morpho Change Log](https://docs.kpk.io/vaults/vaults/morpho/change-log).<br>

* [Ethereum](https://docs.kpk.io/vaults/vaults/morpho/ethereum)
  * [KPK USDC Prime](https://docs.kpk.io/vaults/vaults/morpho/ethereum/usdc-prime)
  * [KPK USDT Prime](https://docs.kpk.io/vaults/vaults/morpho/ethereum/usdt-prime)
  * [KPK ETH Prime](https://docs.kpk.io/vaults/vaults/morpho/ethereum/eth-prime)
  * [KPK USDC Yield](https://docs.kpk.io/vaults/vaults/morpho/ethereum/usdc-yield)
  * [KPK ETH Yield](https://docs.kpk.io/vaults/vaults/morpho/ethereum/eth-yield)
  * [KPK EURC Yield](https://docs.kpk.io/vaults/vaults/morpho/ethereum/eurc-yield)
* [Arbitrum](https://docs.kpk.io/vaults/vaults/morpho/arbitrum)
  * [KPK USDC Yield](https://docs.kpk.io/vaults/vaults/morpho/arbitrum/usdc-yield)

{% hint style="success" %}
**Live metrics:** Track TVL, APY, allocations, and withdrawal liquidity for KPK Morpho vaults on Dune: <https://dune.com/kpk/kpk-morpho-vaults>
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