Morpho tops $500M in deposits on Circle’s Arc in just over two weeks

More than $500 million has flowed into Morpho on Arc in just over two weeks since the network went live.

Arc is Circle’s EVM-compatible Layer-1, and Morpho was wired in as its core credit layer from day one.

The numbers behind the milestone

Arc’s public mainnet launched on September 16, 2026. Morpho went live the same day, which meant lenders and borrowers could start moving capital immediately.

Launch day alone pulled in somewhere between $150 million and $220 million in initial deposits. Most of that landed in USDC and EURC markets, Circle’s dollar and euro stablecoins.

By October 2, 2026, total deposits on Morpho’s Arc deployment reached $500.27 million. Outstanding loans stood at $189.93 million on the same date.

The activity is far from evenly spread. The cirBTC/USDC market accounted for approximately 86% of lending and borrowing on the platform.

cirBTC is Circle’s Bitcoin-backed wrapped token. A cirBTC/USDC market lets someone post Bitcoin exposure as collateral and borrow dollars against it.

That market has been running at near-full utilization. Nearly all the USDC lenders have supplied there is already borrowed.

Who is actually depositing

Deposits were heavily driven by institutional lending rather than individual users chasing yield.

The vault lineup reflects that. Morpho’s curated vaults on Arc are run by names including Steakhouse Financial and Bitwise, firms that pick which markets a vault lends into and how much risk it takes.

Top vaults on Arc include ones from Galaxy and Keyrock, yielding about 0.80% net APY.

The underlying engine is Morpho Blue, which supports variable-rate lending and borrowing.

Background: Circle builds its own rails

Arc is Circle’s attempt to own more of the stack that its stablecoins run on. The network emphasizes stablecoin payments, foreign exchange, and tokenized assets.

Arc’s validator set also includes backing from major institutions like BlackRock and Visa.

Morpho itself is not new to scale. Its broader network held $16.54 billion in total deposits as of early October 2026.

Against that figure, Arc’s $500.27 million is a small slice, roughly 3% of the total.

What this means

With approximately 86% of activity tied to a single cirBTC/USDC market, Arc’s lending story is currently a Bitcoin-collateral story.

Near-full utilization raises practical questions. When a lending market is almost entirely borrowed, lenders looking to exit may have to wait for borrowers to repay or for new deposits to arrive.

Variable rates are the built-in fix. If borrowing pressure stays high, rates in that market should climb and attract more USDC supply.

Curators like Steakhouse Financial and Bitwise, plus vaults from Galaxy and Keyrock, point to a user base that values structure and known counterparties over headline yield. A net APY of about 0.80% on top vaults reinforces that.

The next markers to watch are straightforward. Look at whether deposits keep climbing past $500.27 million, whether loans grow beyond $189.93 million, and whether activity spreads out from the cirBTC/USDC market into EURC and other assets.

Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.