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Morpho V2 To Morpho V1 Roller

The Morpho V2 To Morpho V1 Roller enables rolling of fixed-rate, fixed-term fixed-rate borrow positions from Morpho V2 to Morpho V1 variable-rate markets. Borrowers enabling this contract maximize the likelihood that their position will be renewed at a variable rate for an open term before maturity, instead of being liquidated post maturity.

When enabled, the smart contract allows any third party to renew a borrower’s position into a corresponding Morpho variable-rate open-term market, removing the need for manual repayment. Note that the renewal is only possible if there is sufficient liquidity in the variable rate market.

A user can use this policy in combination with Tenor's Morpho V2 To Morpho V2 Roller contract to try to renew the borrow position at a fixed rate first, and if not possible, renew it at a variable rate. The v2 to v1 roller can thus act as a fallback if the v2 to v2 roll is not possible due to a lack of liquidity or longer term fixed rates being above the user set maximum rate.

How It Works​

1. Set Roll Parameters​

The borrower (or authorized party) calls setUserParams to configure rolling preferences for a specific term market. Parameters are set per termMarketId, which is derived from the loan token and collateral tokens of the Morpho V2 position:

  • rollPeriod: Time window before maturity when rolling is allowed (max 3 days)
  • morphov1MarketIds: List of whitelisted Morpho V1 market IDs eligible for rolling
  • policy: Optional policy contract for custom logic and fees

This allows borrowers to have different rolling strategies for different loan/collateral combinations.

Authorization requirements:

  • The borrower must grant authorization to the roller contract on both Morpho V2 (to withdraw collateral) and Morpho V1 (to borrow on behalf)

2. Roll Execution​

When the roll period begins, any third party can call rollPosition to execute the roll:

Validation checks:

  • Current time is within the roll period window
  • Target market is in the whitelisted market IDs
  • Loan tokens match between source and target markets
  • Borrower has only one collateral type (no mixed collaterals) on Morpho v2
  • Repaid debt does not exceed total debt

Policy execution:

  • Calls policy.beforeRoll() to calculate fees and determine borrowed amount
  • Borrowed amount is capped at 101% of repaid debt

Atomic transfer:

  • Borrows from target Morpho V1 market
  • Executes optional callback to repay source position and handle fees
  • Withdraws collateral from source Morpho V2 position
  • Supplies collateral to target Morpho V1 position
  • Calls policy.afterRoll() to validate fee payment

3. Clear Parameters​

The borrower can call clearUserParams to disable rolling for a specific market