Morpho: DAO Enables Vaults to Allocate to Midnight Markets - Q4 2026

Morpho DAO is set to pass a transaction that enables Morpho Vaults, which hold about $5B in deposits, to allocate to Midnight markets. The change opens a path for a large share of existing vault capital to enter the new lending protocol, with activation planned for Q4 2026.Once enabled, vault curators gain Midnight as a destination for depositor funds, so actual capital inflow depends on their allocation decisions rather than occurring automatically. Because Morpho Vaults hold roughly $5B, even partial allocations could represent meaningful growth in lending activity for Midnight. Market participants tracking MORPHO may watch curator choices and protocol usage as the Q4 activation approaches, since increased deposits would flow through Morpho's infrastructure and affect its revenue.I’ve been asked a lot: Why is Midnight live on only one market? why can’t Morpho Vaults allocate to it yet? why only one chain? Answers below:1. VaultsMorpho Vaults hold ~$5B in deposits but can only deposit in Blue markets, not Midnight markets yet.Enabling vaults to…