> ## Documentation Index
> Fetch the complete documentation index at: https://docs.dynamo.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# Markets

> Learn how isolated lending markets connect suppliers and borrowers, how interest rates are set by utilization, and how to evaluate markets safely.

A lending market on Dynamo is a pool dedicated to a single collateral asset and a single loan asset, such as USDC, ETH, BTC, and others. When you supply the loan asset, you earn interest paid by borrowers. When you [borrow crypto](https://dynamo.finance/), you draw from that loan asset pool against collateral you've posted. Each market operates independently, so activity in one market does not affect another.

## Market isolation in practice

<Note>
  Dynamo surfaces every active Morpho Blue market in a single, filterable list. Each market is a fully isolated lending pool, one loan asset, one collateral asset, one oracle, and one LLTV (Liquidation Loan-to-Value). Nothing that happens in one market can spill over into another.
</Note>

This isolation is intentional. It means:

* **Predictable risk** — you know exactly what oracle and LLTV governs your position
* **No contagion** — a collapse in a high-risk market does not affect your position in a low-risk one
* **Composability** — new markets can be permissionlessly created without modifying existing ones

## How interest rates are determined

Rates in every market are driven by the **interest rate strategy** and **utilization rate**, the share of supplied assets currently being borrowed.

```text theme={null}
Utilization rate = Total borrowed / Total supplied
```

As more borrowers draw from a market, utilization rises and borrow rates increase automatically to attract more suppliers. When utilization falls, borrow rates drop to encourage more borrowing. Supply APY reflects this balance: suppliers earn the interest borrowers pay.

<Tip>
  Check the utilization percentage before supplying. A market running at high utilization pays better supply APY, but it also means less liquidity is immediately available to withdraw.
</Tip>

## Market parameters

Each market is configured with a set of parameters that determine how it behaves. You can inspect these on the market detail page.

| Parameter                          | What it controls                                                                                                                                   |
| ---------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- |
| Collateral asset                   | Which assets can be posted as collateral to borrow from this market                                                                                |
| Loan asset                         | Which assets can be posted to earn APY or borrow against collateral.                                                                               |
| Oracle price feed                  | The on-chain price source used to value collateral compared to the loan asset                                                                      |
| LLTV (Liquidation Loan-to-Value)   | The maximum loan-to-value ratio a borrower can reach before their position becomes eligible for liquidation. Set at market creation and immutable. |
| Interest Rate Model (IRM)          | The contract that determines how borrow and supply rates respond to utilization. Morpho markets use an Adaptive Curve IRM by default.              |
| Market ID                          | The unique 32-byte identifier (`bytes32`) derived from the market's parameters on Morpho Blue.                                                     |
| Loan-to-Value (LTV)                | The current ratio between a position's borrowed value and collateral value. Borrowers must keep this below LLTV.                                   |
| Liquidation Incentive Factor (LIF) | The bonus paid to liquidators when they repay a borrower's debt, derived from the market's LLTV.                                                   |
| Fee                                | The protocol fee charged on borrower interest, expressed as a percentage of interest accrued.                                                      |
| Total supply / Total borrow        | The current aggregate amount supplied and borrowed in the market.                                                                                  |

## Browsing markets

The **Markets** page shows all active markets with live data:

* **Supply APY** — the annualized yield you earn as you [lend crypto](https://dynamo.finance/)
* **Borrow APY** — the annualized cost to borrow from as you take out [crypto currency loans](https://dynamo.finance/)
* **Utilization %** — how much of the supplied liquidity is currently borrowed
* **Available liquidity** — the amount you can withdraw or borrow right now

## Verified vs. unverified markets

Dynamo is permissionless, anyone can create a lending market for any asset. Markets go through a verification process that checks oracle reliability, collateral parameters, and contract integrity before being added to the website.

<Warning>
  Only interact with **verified markets**. Unverified markets may use unreliable price feeds or misconfigured parameters that put your funds at risk. Verified markets are clearly labeled in the UI.
</Warning>

## Market isolation

Each market is fully isolated. A bad debt event or an oracle failure in one market does not spread to any other market. Your exposure is limited to the markets you choose to participate in.

<Note>
  Because markets are isolated, your collateral posted in one market cannot be used to borrow from a different market. You must post collateral separately in each market where you want to borrow.
</Note>