Collateral is locked and can be liquidated
Depositing collateral moves it into your Morpho Blue position. While a debt exists you cannot withdraw more than what keeps the position within the limit. If the oracle value of your collateral falls so that your loan-to-value rises above the market’s liquidation threshold (LLTV), anyone may repay part or all of your debt and take collateral at a discount: 1 / (1 − 0.3 × (1 − LLTV)), capped at 15 %. You do not get a notification; the chain does not wait.
Borrowed assets are a debt
Borrowed stablecoins arrive in your wallet like any balance, but they are owed back with interest that accrues every second at the market’s current rate. The rate changes with utilisation and can rise sharply when a market is nearly fully borrowed. Swapping or sending borrowed assets does not reduce the debt.
Prices come from oracles, and oracles have edges
- Stock Token feeds publish 24/5. On weekends and US market holidays their readings age; HoffStock pauses new borrowing and withdrawal on those markets when a reading is older than 36 h, but Morpho itself keeps using the last price, so a Monday-open gap can liquidate a position that looked safe on Friday.
- The USDe / USDG market values USDe at exactly 1.0 through a meta-oracle until a timelocked challenge switches it to a Chainlink-fed backup. A USDe depeg is not reflected immediately.
- Vault-rate oracles (spUSDG) follow the vault’s own accounting, not a market price.
- An issuer can pause a Stock Token or flag its pricing during corporate actions; HoffStock shows both flags.
Liquidity is not guaranteed
You can only borrow what lenders supplied and nobody else has borrowed, and you can only withdraw lent assets that are idle. Some listed markets hold little or no liquidity; the figure on the Markets page is live.
Bad debt is socialised to lenders
If a liquidation leaves a borrower with debt but no collateral, Morpho writes the shortfall off against the market’s suppliers. Lending is not risk-free.
Smart-contract and interface risk
HoffStock’s own code is not audited. Morpho Blue is a third-party protocol; its published reviews are linked on the Transparency page. HoffStock signs nothing on your behalf and holds no funds, but a bug in this interface could prepare a wrong transaction — which is why every call is decoded, checked against the allow-list, simulated from your account and shown to you before your wallet opens.
Administrative permissions
Morpho Blue’s owner can enable new interest-rate models and LLTV values and set a protocol fee (up to 25 % of interest) per market; it cannot move your funds or change an existing market’s parameters. Feed operators publish prices; Morpho oracle contracts are immutable once created. HoffStock has no admin key over anything on-chain; its only levers are which markets it lists and the interface policies described in the docs.
Network
Everything runs on Robinhood Chain (chain 4663). Transactions are final. Sending tokens to a wrong address or a contract that cannot release them loses them. Keep ETH for gas.
More detail: documentation · transparency report.