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Dynamo assigns a risk tier to every market and vault throughout the Morpho protocol so you can quickly assess risk before supplying capital. Tiers are derived from objective, on-chain parameters, not subjective judgment.

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Market Risk Rating

Each market is evaluated on three variables:

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Tiers

All three conditions must be met:
  • LLTV ≥ 86%
  • Market TVL > $10M
  • Market has been live for at least 3 months
All three conditions must be met, and the market must not already qualify as Low risk:
  • LLTV ≥ 77%
  • Market TVL > $1M
  • Market has been live for at least 1 month
Any market that does not meet the criteria for Low or Medium risk.Typical causes: aggressive LLTV (below 77%), small TVL, or a very recently listed market.

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Vault Risk Rating

Vaults are evaluated on three variables:

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Tiers

All conditions must be met:
  • Total Supplied > $10M
  • At least 70% of market exposure is in Low-risk markets
All conditions must be met, and the vault must not already qualify as Low risk:
  • Total Supplied > $1M
  • At least 30% of market exposure is in Low-risk markets
Any vault that does not meet the criteria for Low or Medium risk.Typical causes: small total supplied, heavy allocation to Medium- or High-risk markets, or a recently launched vault.
Risk tiers are structural heuristics, not predictions. A Low-risk market can still suffer losses from oracle failure, smart contract bugs, or extreme collateral price moves. Always read the underlying parameters before depositing.