Lending protocol Morpho has launched Morpho Midnight on Base, adding fixed-rate fixed-term loans to its onchain lending network along with variable rate marketplaces offered by Morpho Blue.

In an announcement sent to Cointelegraph, Morpho said the offer-based protocol allows lenders and borrowers to propose their own interest rates, maturities and other loan terms, rather than relying on the utilization curve set out in the protocol. Loans are granted in the form of fixed commitments, and terms are determined through competitive offers, rather than within an algorithmic pricing pool.

Predictable interest rates and defined maturities are standard features of customary credit markets. However, they are occasional in decentralized finance (DeFi), where external financing costs generally fluctuate depending on market usage. Fixed terms could make onchain lending more attractive to institutions and enterprises that need to manage financing costs, returns and risk exposure in advance.

A Morpho spokesperson told Cointelegraph that Midnight is available on the Base mainnet and initially supports cbBTC and USDC in multiple maturities. A spokesman said Morpho deliberately held back the launch as part of a phased rollout that prioritizes safety.

The spokesman said lenders, borrowers and trustees already lively on Morpho Blue have shown interest in Midnight. Several unidentified companies and institutions are also developing products based on the beta protocol, and announcements are expected when these products become available.

Morpho’s fixed-rate loan plans are taking shape

First, Morpho scratched fixed rates system in 2025 as part of the broader “Morpho V2” action plan. It described an intent-based peer-to-peer marketplace where users could submit custom offers, price loans based on market demand, and maintain a variable rate of capital-generating return until a fixed-rate offer was matched.

In April Morfo named Midnight Fixed Rate Protocol and clarified that it does not replace Morpho Blue. While Blue provides open pools of floating rate loans, Midnight conveys credit risk, interest rate and loan duration to market participants.

So protocol released Midnight’s May whitepaper and codebase states that the “offered capital” model was intended to avoid a recurring problem with fixed-rate DeFi protocols: liquidity lock-in or fragmentation at maturities.

Related: Grayscale plans regular cash payouts from ETH and SOL staking rewards

Midnight’s launch follows Morpho’s June $175 million funding round led by Paradigm, Andreessen Horowitz’s a16z cryptocurrency and Ribbit Capital. Morpho said at the time that it planned to expand integration with banks, asset managers and huge platforms, while adding features related to customary lending markets.

Morpho’s infrastructure already underpins variable rate lending products distributed through major crypto platforms. In April, Coinbase launched Morpho-based USDC lending for UK users, allowing them to borrow against Bitcoin (BTC), Ether (ETH), and cbETH on Base.

The loans have variable interest rates and no fixed repayment schedule, illustrating the open-ended lending model that Midnight intends to complement.

Warehouse: Ethereum’s WSE may drag other blockchains into its orbit