Interacting with Isolated Markets

Deposit

Users can interact with Morpho's Isolated Markets directly through the Moonwell app. The process is simple and intuitive:

  1. Navigate to the Moonwell app and connect your wallet

  2. Select "Markets" from the top navigation bar

  3. Choose the Isolated market corresponding to the asset you wish to to use as collateral and the asset you wish to borrow. The asset listed first in the Isolated pair is the collateral asset, followed by the borrow asset.

    • For example, if you select Isolated ETH/USDC, you will use ETH as collateral to borrow USDC.

Isolated markets contain the Isolated tag, designating the market type

  1. When you're ready, click "Supply" on the preferred market.

  1. Enter the amount you want to deposit using the "Supply" modal and confirm the transaction

ETH/USDC Isolated Market

  1. After completing the collateral deposit, you are now ready to borrow against the collateral asset.

Borrow

  1. Now that you have supplied collateral, it's time to borrow using this collateral. Click the 'Borrow" tab of the modal.

  1. Enter the amount you want to borrow and confirm the transaction.

  1. Once the transaction has completed, you will have successfully borrowed from the desired market. The borrowed assets will be sent directly to your wallet.

Credit and Liquidations

Each Isolated Market has its own set of risk parameters, including its own Collateral Factor and Credit Limit.

If your Credit Remaining (the value of your collateral) drops below 0% or $0, a liquidation event may be triggered.

You can find your Credit Remaining on the specific market page.

Note that Credit Remaining is exclusive to each Isolated Market and does not affect the Moonwell "Core Markets."

Learn more about Credit and Liquidations

Collateral Factor and Credit Remaining is visible on every Isolated Market page.

Withdraw

  1. Navigate to the market you wish to withdraw from. This can be done by visiting the "Markets" or "Portfolio" page.

Your Portfolio will present you with the option to withdraw under "Open Positions." You will be taken to that market's page to withdraw the collateral asset.

  1. Select "Withdraw" from the modal and specify the amount you wish to withdraw from the market. Confirm the transaction in your wallet and wait for it to complete. Once successful, the specified amount will be have been withdrawn and can be found in your wallet.

Unlike Moonwell "Core Markets", you can always withdraw your supplied collateral if you repay your loan.

In this example, the ETH token is used. However, you can select other Isolated Markets by using the dropdown menu.

Loan Repayment

Unlike traditional finance, there are no fixed repayment timelines. Borrowers can maintain their loans indefinitely as long as their "Credit Remaining" account balance stays above $0 or 0%. If it falls below this threshold, a liquidation process begins, and the borrower's collateral is forfeited to cover the loan.

Although there are no fixed repayment schedules, interest continues to accrue over time. This accrued interest can reduce the borrower's remaining credit, increasing the risk of liquidation. The borrowing rate is influenced by the supply and demand of the underlying asset.

  1. Navigate to the market for which you would like to repay the borrowed asset. This can be done by visiting the "Markets" or "Portfolio" page.

Your Portfolio will present you with the option to repay the borrowed asset under "Open Positions." You will be taken to that market's page to perform the repayment.

  1. Select "Repay" from the modal and specify the amount you wish to repay of the borrowed asset. To repay all of the borrowed asset, click "MAX." Confirm the transaction in your wallet and wait for it to complete. Once successful, the specified amount will be have been repaid and you can now withdraw the collateral asset from the market.

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