Isolated Markets
Isolated Markets bring Morpho isolated lending markets into the Spark app. Each market is a self-contained lending pair — one collateral asset and one loan asset — with its own oracle, liquidation parameters, and interest rate model. Because every market stands on its own, the risk of one market never spills into another, and markets can offer higher, purpose-built loan-to-value ratios than a shared pool typically would.
Isolated Markets sit alongside SparkLend under the app's Borrow menu. SparkLend is Spark's shared, pooled money market; Isolated Markets are independent collateral/loan-pair markets powered by Morpho. See Borrow for a side-by-side comparison.
What is an isolated market?
A Morpho market is defined by five parameters that are fixed when the market is created and can never change:
- Collateral token — the asset you supply to back your loan.
- Loan token — the asset you borrow.
- Oracle — the price feed used to value collateral against the loan asset.
- Liquidation LTV (LLTV) — the maximum share of your collateral's value you can borrow before the position becomes liquidatable. Shown in the app as Max LTV.
- Interest Rate Model (IRM) — the curve that sets borrow and supply rates from the market's utilization.
Because these parameters are immutable, a market's rules cannot be changed underneath you after you enter it. To learn how Morpho markets work under the hood, see the Morpho documentation.
Guides
Use these guides for step-by-step Isolated Markets workflows:
- Feature Overview
- Overview of Markets
- Supplying Collateral
- Borrowing Assets
- Liquidity & the Public Allocator
- Repaying Your Loan
- Withdrawing Collateral
- Liquidations
Risk Architecture
Isolated Markets inherit Morpho's risk model. The design goal is the same as the rest of Spark: a failure in any single component should stay contained rather than cascade.
Market Isolation
Every market is a standalone pair of one collateral asset and one loan asset. Your collateral in one market is never exposed to borrowers, oracles, or bad debt in any other market. If a market suffers a shortfall, only suppliers of that market's loan asset are affected — never the wider protocol or other markets.
Immutable Market Parameters
A market's collateral token, loan token, oracle, LLTV, and interest rate model are set at creation and are immutable. The terms you entered under cannot be altered after the fact. New markets can be created with different parameters, but existing markets are fixed.
Per-Market Oracle
Each market prices collateral against its loan asset using the oracle chosen when the market was created. In the app, the Oracle panel on the market details page shows the price feed and how the collateral/loan price is derived. Because the oracle is part of the immutable market definition, it cannot be swapped out later.
Liquidation and the Health Factor
Borrowing power is bounded by the market's LLTV. Each position has a Health Factor derived from the value of your collateral, the LLTV, and your debt. If the Health Factor falls below 1, the position can be liquidated and a market-specific liquidation penalty applies. See Liquidations for the full mechanics.
Curated Liquidity and the Public Allocator
Liquidity for a market comes from suppliers and, on demand, from Morpho vaults managed by professional curators. The Public Allocator lets a market pull additional liquidity from other Morpho markets in the same borrow transaction, up to flow caps that curators configure. Flow caps bound how much liquidity can move per transaction, keeping reallocation within risk limits the curators set.
Where to Verify
| Item | Address or source |
|---|---|
| Live markets and parameters | Spark App — Isolated Markets |
| Per-market oracle and contracts | Market details page → Oracle and Token contracts |
| Morpho protocol mechanics | Morpho Documentation |
| Morpho security and audits | Morpho Security |
FAQ
Who powers Isolated Markets?
Isolated Markets are powered by Morpho. Spark integrates Morpho's isolated lending markets directly into the Spark app so you can supply, borrow, repay, and withdraw without leaving Spark.
How are Isolated Markets different from SparkLend?
SparkLend is a shared, pooled money market: you can supply many assets into common pools and borrow against a combined position. Isolated Markets are independent collateral/loan-pair markets — each position lives in a single market with its own parameters and its own isolated risk.
On which networks are Isolated Markets available?
Isolated Markets are available on the networks shown in the app. Use the network selector on the Isolated Markets page to see which markets are live on each network.
What does it cost to use Isolated Markets?
Interacting with a market requires onchain transactions, so you pay the standard network fees of the chain you are on. Borrows that source liquidity through the Public Allocator may also incur a reallocation fee, which is shown and acknowledged in the Borrow dialog before you confirm.
What is the Health Factor?
The Health Factor measures how close your position is to liquidation. It compares the value of your collateral, adjusted by the market's liquidation LTV, to what you have borrowed. A higher Health Factor means more safety margin. If it falls below 1, your position can be liquidated. See Liquidations.