Morpho WETH/wstETH on Base - Staked ETH Leverage

What is Morpho WETH / wstETH Base?

Morpho WETH / wstETH is an isolated lending market on Base where WETH is the loan asset and wrapped staked ETH (wstETH) serves as collateral. This market enables recursive staking strategies and ETH leverage on Base.

How This Market Works

ETH-correlated asset lending:

WETH suppliers earn yield from borrowers
Borrowers pledge wstETH as collateral
High LTV ratios due to price correlation
Efficient leveraged staking positions

Correlated Assets: WETH and wstETH prices move together, enabling capital-efficient borrowing.

What Assets Are Involved

Supply Asset: WETH on Base Collateral Asset: wstETH (Wrapped Staked ETH) Network: Base Market Type: Correlated asset lending

wstETH characteristics:

Lido's wrapped stETH
Non-rebasing token design
Accumulates staking rewards
Deep DeFi liquidity

Recursive Staking Strategy

Popular strategy:

Hold wstETH (earning ~3-4% staking yield)
Borrow WETH against wstETH
Stake borrowed ETH for more wstETH
Repeat to amplify yield

This market enables leverage on staking returns.

Base Network Deployment

Operating on Base:

Low gas for recursive transactions
Fast execution
Growing wstETH liquidity
Coinbase ecosystem

Risk Disclosures

Smart Contract Risk: Morpho Blue, WETH, and wstETH contracts. Staking Risk: wstETH value depends on Lido validators. Leverage Risk: Recursive strategies amplify both gains and losses. Layer 2 Risk: Base sequencer dependencies. Oracle Risk: wstETH/ETH exchange rate accuracy. Utilization Risk: High demand may limit WETH withdrawals. Correlation Risk: ETH price drops affect both assets.

Morpho WETH / wstETH Base