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Documentation Index

Fetch the complete documentation index at: https://docs.generalmarket.io/llms.txt

Use this file to discover all available pages before exploring further.

You supply USDC. Others borrow against their convictions. When their convictions fail, you are made whole. This is called lending. General Market integrates with Morpho to offer lending and borrowing against Dex Traded Fund (DTF) shares. Lenders deposit USDC and earn yield. Borrowers pledge DTF shares as collateral and borrow USDC without selling. The arrangement works until it does not. The section on liquidation explains what happens then.

​
Full Lending Pipeline

  SUPPLY SIDE                    MORPHO BLUE                  BORROW SIDE
  ===========                    ==========                   ===========

  +----------+                   +------------------+         +----------+
  |  Lender  |  deposit USDC    |                  |         |  Borrower|
  |          | ---------------> |  MetaMorpho      |         |          |
  |  Earns   |                  |  Vault (ERC4626) |         |  Holds   |
  |  yield   |  vault shares    |                  |         |  ITP     |
  |          | <--------------- |  Distributes     |         |  shares  |
  +----------+                  |  USDC across     |         +-----+----+
                                |  Morpho markets  |               |
                                +--------+---------+               |
                                         |                         |
                         reallocate()    |                         |
                    +--------------------+----+                    |
                    |                    |    |                    |
              +-----v------+    +-------v--+ |  +-----------+     |
              |Morpho Mkt  |    |Morpho Mkt| |  |Morpho Mkt |     |
              |ITP-A / USDC|    |ITP-B/USDC| |  |ITP-C /USDC| <---+
              |            |    |          | |  |           |  deposit ITP
              | Lenders    |    |          | |  | Borrowers |  as collateral
              | earn       |    |          | |  | borrow    |
              | interest   |    |          | |  | USDC      | ---> Borrower
              +------------+    +----------+ |  +-----------+      gets USDC
                                             |
                                  +----------v----------+
                                  |  Curator Bot        |
                                  |                     |
                                  |  - Monitors util.   |
                                  |  - Sets rates (SERM)|
                                  |  - Rebalances vault |
                                  |  - Updates NAV      |
                                  +---------------------+
Each DTF has its own isolated Morpho market. Risk does not spill across DTFs. A collapse in one market is a private catastrophe. The others continue undisturbed.

​
Depositing USDC to Earn Yield

Supply USDC. Earn interest from borrowers. The yield exists because someone else is taking risk with your money. That is the entire mechanism.
1

Navigate to Lend

Open the Lend section. The page shows the current supply APY and total deposited amount. The APY fluctuates. It is a market price for patience.
2

Enter USDC Amount

Type the amount of USDC to deposit. The available USDC balance is shown above the input field.
3

Approve and Deposit

The wallet prompts for:
  1. Approve the USDC spend allowance for the Morpho vault (first time only)
  2. Confirm the deposit transaction
Once confirmed, the USDC enters the MetaMorpho vault and immediately begins earning yield. The transition from idle capital to productive capital takes one block.
4

Track Earnings

The deposited balance and accrued interest are displayed in real time. Yield accrues continuously. No lock-up period. You can leave whenever you want. Most people do not.
  YOUR DEPOSIT JOURNEY
  ====================

  Wallet                 MetaMorpho Vault              Morpho Markets
  +------+               +---------------+              +------------+
  |      |  1. approve   |               |              |            |
  | USDC | ------------> |  Checks       |              |  ITP-A mkt |
  |      |               |  allowance    |              |  ITP-B mkt |
  |      |  2. deposit   |               |  3. vault    |  ITP-C mkt |
  |      | ------------> |  Mints vault  | -----------> |            |
  |      |               |  shares to    |  allocates   |  Your USDC |
  |      |  vault shares |  your wallet  |  across mkts |  earns     |
  |      | <------------ |               |              |  interest  |
  +------+               +---------------+              +------------+

  Your vault shares represent your proportional claim on the
  vault's total USDC (deposited + interest earned).
Yield comes from borrowers who pay interest on their loans. The APY fluctuates with supply and demand. When everyone wants to lend, the rate drops. When everyone wants to borrow, it rises. The curator bot adjusts rates via the SERM algorithm — see Interest Rate Model.

​
Borrowing Against DTF Shares

Borrowing is leverage disguised as liquidity. You keep your DTF position and get USDC. The debt grows. The position does what it wants.

​
Check Market Availability

Not all DTFs have a Morpho lending market. Check the DTF’s detail page or the Lend section.
If no Morpho lending market exists for a DTF, its shares cannot be used as collateral. No market, no leverage. The protocol does not create markets out of hope.

​
Deposit Collateral

1

Select DTF

In the Borrow section, select the DTF whose shares will serve as collateral.
2

Deposit Shares

Enter the number of DTF shares to deposit. The wallet will prompt for:
  1. Approve the share transfer to the Morpho market
  2. Confirm the collateral deposit transaction
The DTF shares are now locked as collateral in the Morpho market.

​
Borrow USDC

1

Choose Borrow Amount

Enter the USDC amount to borrow. The interface displays three numbers. Read all three.
  • Collateral value — current USD value of the deposited DTF shares
  • Health factor — ratio of collateral value to debt. Below 1.0, you are liquidated.
  • Maximum borrow — the maximum USDC available at current collateral value. Borrowing the maximum is the fastest path to liquidation.
2

Confirm Borrow

Confirm the transaction. USDC arrives in your wallet. The debt begins accruing interest immediately. The clock starts.
  BORROW FLOW
  ============

  +----------+                  +------------------+         +----------+
  |          |  1. approve ITP  |                  |         |          |
  | Borrower | --------------> |  Morpho Blue     |         | ITP NAV  |
  |  Wallet  |                 |  Market          |         | Oracle   |
  |          |  2. supply      |                  |         |          |
  |          |  collateral     |  Locks ITP       |  price  |  BLS-    |
  |          | --------------> |  in position     | <------ |  verified|
  |          |                 |                  |         |  NAV     |
  |          |  3. borrow      |  Checks:         |         +----------+
  |          | --------------> |  - HF > 1.0      |
  |          |                 |  - USDC avail.   |
  |          |  4. USDC        |                  |
  |          | <-------------- |  Transfers USDC  |
  +----------+                 +------------------+

​
The Curator’s Role

The curator bot runs 24/7. It does not sleep. It does not hesitate. It performs three functions that, if performed by a human, would require constant vigilance and no capacity for self-deception: 
  +-------------------------------------------------------------+
  |                     CURATOR BOT                              |
  +-------------------------------------------------------------+
  |                                                             |
  |  1. NAV ORACLE UPDATES                                      |
  |     Oracles compute NAV --> BLS aggregate --> push on-chain  |
  |     ITPNAVOracle.updatePrice(price, sig, cycle)              |
  |                                                             |
  |  2. INTEREST RATE SETTING (SERM)                            |
  |     Read utilization across all markets                      |
  |     Run SERM algorithm (kink + stress + concentration)       |
  |     Push rates to CuratorRateIRM.setRates()                  |
  |                                                             |
  |  3. VAULT REBALANCING                                       |
  |     Monitor utilization per market                           |
  |     Supply USDC to high-utilization markets                  |
  |     Withdraw from low-utilization markets                    |
  |     Execute vault.reallocate(MarketAllocation[])             |
  |                                                             |
  +-------------------------------------------------------------+

  Rate Update Cycle (~5 minutes):
  ===============================

  t=0      Read all market states (totalSupply, totalBorrow)
  t=1s     Fetch 24h price data for stress calculation
  t=2s     Run SERM for each market
  t=3s     Submit setRates() tx to CuratorRateIRM
  t=5min   Repeat
DTF collateral is priced by the ITPNAVOracle. Three oracles compute NAV from live market prices. Two must agree. The price is then pushed on-chain with a BLS signature. Trust is replaced by cryptography. This is the entire premise. 
  ITP NAV = SUM(qty[i] * price[i]) / 1e18

  Example: "Top 100 Crypto" ITP
  ==============================

  +--------+----------+----------+-----------+
  | Asset  | Qty/Share| Price    | Value     |
  +--------+----------+----------+-----------+
  | BTC    | 0.000150 | $67,000  | $10.05    |
  | ETH    | 0.002800 | $3,400   |  $9.52    |
  | SOL    | 0.053000 |   $180   |  $9.54    |
  | BNB    | 0.016000 |   $590   |  $9.44    |
  | ... (96 more)                | ...       |
  +--------+----------+----------+-----------+
  | NAV per share                | $1.0450   |
  +------------------------------+-----------+

  Oracle price (Morpho 36-dec format):
  = 1.045 * 10^36
  = 1,045,000,000,000,000,000,000,000,000,000,000,000
The oracle enforces safety checks. Each one exists because someone, somewhere, found a way to exploit its absence:
  • BLS signature verification (2/3 multi-pairing threshold)
  • 10% max price deviation per update (rejects sudden jumps)
  • Monotonic cycle numbers (prevents replay attacks)
  • Chain ID + oracle address in the signed message (prevents cross-chain replay)
The NAV oracle updates every oracle cycle. Between updates, Morpho uses the last BLS-verified price. There is a brief lag between market reality and on-chain truth. In calm markets, this lag is irrelevant. In volatile markets, it is the difference between safety and liquidation.

​
Health Factor and Risk Management

The health factor is a single number that measures the distance between your position and its destruction: 
  HEALTH FACTOR = (collateral * oraclePrice / 1e36 * LLTV / 1e18) / debt

  Example:
    collateral  = 10,000 ITP shares
    oraclePrice = $1.045 (in 36-dec format)
    LLTV        = 77%
    debt        = $5,000 USDC

    collateralValue = 10,000 * 1.045 = $10,450
    maxBorrow       = 10,450 * 0.77  = $8,046.50
    healthFactor    = 8,046.50 / 5,000 = 1.61

    +====================================================+
    |                                                    |
    | HF = 1.61    STATUS: MODERATE - Monitor regularly  |
    |                                                    |
    +====================================================+
Health FactorStatusAction
> 2.0SafeComfortable buffer
1.5 — 2.0ModerateMonitor regularly
1.0 — 1.5At RiskConsider repaying or adding collateral
< 1.0LiquidatableThe collateral may be liquidated

​
What Moves the Health Factor

  HEALTH FACTOR DECREASES WHEN:        HEALTH FACTOR INCREASES WHEN:
  ==============================        ==============================

  +---------------------------+         +---------------------------+
  | ITP NAV drops             |         | ITP NAV rises             |
  | (underlying assets fall)  |         | (underlying assets rise)  |
  +---------------------------+         +---------------------------+
  | Interest accrues          |         | Borrower repays debt      |
  | (debt grows over time)    |         | (debt decreases)          |
  +---------------------------+         +---------------------------+
  | Borrower withdraws       |         | Borrower adds more        |
  | collateral                |         | collateral                |
  +---------------------------+         +---------------------------+
If the NAV drops enough to push the health factor below 1.0, the position is liquidated. A liquidator repays part of the debt and claims a portion of the DTF collateral at a discount. The protocol does not warn you. It does not wait. The math executes.

​
Tips to Stay Safe

Safety is not a state. It is a practice.
  • Do not borrow the maximum amount. The maximum is the edge of the cliff. Stand back from it.
  • Monitor the health factor during volatile markets. The number that was safe yesterday is not safe today.
  • Diversified DTFs have more stable NAVs. Stability is not glamorous. It is useful.
  • Add more collateral if the health factor is declining. The cost of adding collateral is less than the cost of liquidation.

​
Liquidation

When the health factor reaches 1.0, the position becomes eligible for partial liquidation. The word “partial” is not comforting. It means you lose some of your collateral instead of all of it. 
  LIQUIDATION TIMELINE
  ====================

  Time ------>

  HF 2.0  |
          |  .
          |    .
  HF 1.5  |      .
          |        .              <-- Consider adding collateral here
          |          .
  HF 1.0  |============X         <-- LIQUIDATION ELIGIBLE
          |            |\
          |            | \
  HF 0.5  |            |  .      <-- Partial liquidation fires
          |            |    .         HF recovers above 1.0
          |            |      *
  HF 1.1  |            |      * <-- Position stabilized
          +------------+--------+----->
           NAV dropping  Liq.    After

​
How Liquidation Works

The mechanics are impersonal. The consequences are not.
  1. Health factor falls below 1.0 (DTF NAV dropped, or interest accrued).
  2. Any address can call liquidate() on Morpho Blue. The liquidator is a stranger. They are motivated by profit.
  3. The liquidator repays a portion of the borrower’s USDC debt.
  4. In return, the liquidator receives an equivalent value of DTF collateral plus a liquidation bonus (discount).
  5. The borrower keeps whatever remains. It is less than they started with.
  LIQUIDATION MATH
  ================

    Borrower's position:
    +-------------------------------------------+
    | Collateral: 10,000 ITP @ $1.00 = $10,000  |
    | Debt:       $8,000 USDC                    |
    | LLTV:       77%                            |
    | HF:         (10,000 * 0.77) / 8,000 = 0.96|
    +-------------------------------------------+

    Liquidator repays $2,000:
    +-------------------------------------------+
    | Receives: $2,000 * (1 + 5%) / $1.00       |
    |         = 2,100 ITP shares                 |
    | (5% liquidation bonus = profit incentive)  |
    +-------------------------------------------+

    After liquidation:
    +-------------------------------------------+
    | Collateral: 7,900 ITP @ $1.00 = $7,900    |
    | Debt:       $6,000 USDC                    |
    | HF:         (7,900 * 0.77) / 6,000 = 1.01 |
    +-------------------------------------------+

    Result: HF restored above 1.0. Borrower lost 2,100
    ITP but still has 7,900 ITP and $8,000 of original
    borrowed USDC (of which $6,000 remains as debt).
Liquidation is partial. Only enough collateral is seized to bring the health factor back above 1.0. The position survives. Diminished, but alive. This is the protocol’s version of mercy.

​
Liquidation Price

The liquidation price is the NAV at which the health factor reaches 1.0. It is a number worth knowing. It is the floor beneath which your position ceases to be yours: 
  liq_price = debt * 1e36 * 1e18 / (collateral * LLTV * 1e36)

  Simplified:
  liq_price = debt / (collateral * LLTV)

  Example:
    debt       = $5,000
    collateral = 10,000 ITP
    LLTV       = 77%

    liq_price = 5,000 / (10,000 * 0.77) = $0.6494 per ITP

    If ITP NAV drops from $1.045 to $0.6494 (-37.9%),
    the position becomes liquidatable.

​
Repaying Debt

Debt is repaid the same way it was created. One transaction. The difference is the interest that accrued while you were deciding.
1

Navigate to Your Position

Open the Borrow section. Active Morpho loans are listed with the current debt amount (principal + accrued interest).
2

Enter Repayment Amount

Enter the amount of USDC to repay. Partial repayment is supported, or click Max to repay the full outstanding debt including accrued interest.
3

Confirm Repayment

Approve and confirm the repayment transaction. The debt balance decreases and the health factor improves.
When repaying the full debt, use “Max” / “Repay All”. This uses borrow shares, not a USDC amount, to ensure dust-free repayment. Interest accrues between the moment you see the number and the moment you confirm the transaction. The protocol accounts for this. You do not have to.

​
Withdrawing Collateral

After repaying debt, you can withdraw DTF shares from the collateral pool. The shares return to your wallet. They are yours again.
1

Check Available Collateral

The Borrow section shows how many shares can be withdrawn without dropping the health factor below safety. The number is lower than you expect. The debt constrains you.
2

Enter Withdrawal Amount

Enter the number of DTF shares to withdraw. The interface prevents withdrawing an amount that would put the position at liquidation risk. The contract protects you from yourself.
3

Confirm Withdrawal

Confirm the withdrawal transaction. The DTF shares are returned to the borrower’s wallet.
To close a position entirely: repay the full debt first, then withdraw all collateral. The order matters. You cannot reclaim what secures an outstanding obligation.

​
Withdrawing Deposited USDC

Lenders can withdraw at any time. In theory. In practice, withdrawal depends on liquidity in the pool. If most of the USDC is currently borrowed, you wait.
1

Go to the Lend Section

The deposited USDC balance and earned yield are shown at the top of the page.
2

Enter Withdrawal Amount

Enter the amount of USDC to withdraw. Lenders can withdraw up to the full balance (deposited amount plus accrued yield).
3

Confirm Withdrawal

Confirm the transaction. USDC is transferred back to the lender’s wallet.
If utilization is very high, only a partial withdrawal may be available. Your remaining balance continues to earn yield — at an elevated rate, since high utilization means high demand. The yield is consolation for the illiquidity.

​
Interest Rate Dynamics

The interest rate is not set by a person. It is computed by the SERM algorithm in the curator bot. The algorithm has no opinions. It has inputs. 
  RATE COMPONENTS
  ===============

  Final Rate = base_rate * stress_mult * conc_mult * liq_mult + tier_premium

  1. BASE RATE (kink curve from global utilization)
     +--------------------------------------------+
     | 0%  util  -->  2% APR   (floor)            |
     | 80% util  -->  5% APR   (kink point)       |
     | 100% util --> 100% APR  (ceiling)           |
     +--------------------------------------------+

  2. STRESS MULTIPLIER (market volatility)
     +--------------------------------------------+
     | Calm markets    -->  1.0x  (no change)      |
     | 5% 24h drop     -->  1.25x                  |
     | 10% 24h drop    -->  1.50x                  |
     | Extreme (capped)-->  3.50x  (stress=5)      |
     +--------------------------------------------+

  3. CONCENTRATION MULTIPLIER
     +--------------------------------------------+
     | Well-diversified ITP  -->  ~1.0x            |
     | Single asset dominates --> higher multiplier|
     +--------------------------------------------+

  4. LIQUIDITY MULTIPLIER
     +--------------------------------------------+
     | BTC, ETH (liquid)  -->  lower multiplier    |
     | Small-cap tokens   -->  higher multiplier   |
     +--------------------------------------------+

  5. TIER PREMIUM
     +--------------------------------------------+
     | Tier A (blue-chip) -->  +0.0%               |
     | Tier B (medium)    -->  +0.5%               |
     | Tier C (higher)    -->  +1.0%               |
     | Tier D (new/risky) -->  +2.0%               |
     +--------------------------------------------+


  Supply APY = Borrow APY * utilization_rate

  Example: 8% borrow APY, 70% utilization
           Supply APY = 8% * 0.70 = 5.6%
The curator pushes rates on-chain every ~5 minutes. If the curator goes offline for more than 48 hours, a punitive 100% APR rate kicks in automatically. The protocol assumes the worst. In the absence of supervision, it charges accordingly.