Morpho USDC/PT-cUSD - Pendle Principal Token Lending

What is Morpho USDC / PT-cUSD?

Morpho USDC / PT-cUSD is an isolated lending market where USDC is the loan asset and Pendle Principal Tokens for cUSD (PT-cUSD) serve as collateral. This market enables holders of fixed-yield positions to access liquidity without unwinding their yield strategies.

How This Market Works

The market connects USDC lenders with PT holders:

USDC suppliers earn yield from borrowers
Borrowers pledge PT-cUSD as collateral
Interest rates adjust based on utilization
Liquidations protect lenders if collateral falls

Principal Token Mechanics: PT-cUSD represents the principal portion of a yield-bearing cUSD position with a fixed maturity date.

What Assets Are Involved

Supply Asset: USDC (USD Coin) Collateral Asset: PT-cUSD (Pendle Principal Token for cUSD) Maturity: January 29, 2026 Market Type: Fixed-income collateralized lending

PT-cUSD characteristics:

Fixed redemption value at maturity
Trades at discount before maturity
Pendle protocol integration
Dollar-denominated principal

Pendle Principal Tokens Explained

Pendle splits yield-bearing assets into:

PT (Principal Token): Redeemable for underlying at maturity
YT (Yield Token): Receives yield until maturity

PT holders can borrow against their fixed-income positions.

Use Cases

Borrowers use this market for:

Liquidity without selling PT positions
Leveraging fixed-yield strategies
Capital efficiency on yield positions
Avoiding early redemption penalties

Risk Disclosures

Smart Contract Risk: Exposure to Morpho Blue, USDC, Pendle, and cUSD contracts. PT Valuation Risk: PT prices depend on time to maturity and rates. Maturity Risk: PT behavior changes as maturity approaches. Oracle Complexity: PT pricing requires specialized oracles. Underlying Risk: PT value tied to cUSD stability. Utilization Risk: High demand may limit USDC withdrawals. Fixed Income Risk: Interest rate changes affect PT values.

Morpho USDC / PT-cUSD