# DeFi lending institutionalization and Base network growth > Live situation record from CLSTR: https://clstr.news/situations/defi-lending-institutionalization-and-base-network-growth > Updated: 2026-08-17T19:23:46.000Z. Sources: 4. Developments: 2. The decentralized finance (DeFi) lending sector is experiencing a strategic shift toward institutional participation and liquidity concentration on Layer-2 networks. Morpho launched its Midnight protocol on the Base network, a fixed-rate, fixed-term lending solution designed to provide predictable costs and yields similar to traditional credit markets. This launch aimed to attract institutional users by reducing volatility barriers for on-chain treasury financing. Following these developments, the broader lending landscape has seen major protocols adjusting their focus. Compound has allocated a $52 million budget to pivot toward banks and asset managers by recruiting traditional finance veterans. Meanwhile, the Base network has emerged as a significant hub for on-chain lending, with its liquidity driven largely by Morpho’s deployment. The ecosystem on Base is heavily concentrated in USDC, with curated USDC vaults representing over 22% of the global market for such products. ## Timeline ### 2026-08-17: DeFi lending shifts as Compound pivots to institutions and Base grows liquidity DeFi lending protocols are evolving, with Compound pivoting toward institutional users via a $52M budget and Coinbase’s Base blockchain capturing $3.28B in lending liquidity. 4 sources. https://clstr.news/cluster/defi-lending-shifts-as-compound-pivots-to-institutions-and-base-grows-liquidity ### 2026-07-21: Morpho launches Midnight fixed-rate lending protocol on Base Morpho has launched the Midnight protocol on Base, offering fixed‑rate, fixed‑term lending for institutional finance and expanding its DeFi credit services. 4 sources. https://clstr.news/cluster/morpho-launches-midnight-fixed-rate-lending-protocol-on-base --- Cite as: DeFi lending institutionalization and Base network growth. CLSTR, https://clstr.news/situations/defi-lending-institutionalization-and-base-network-growth