This is how I see the lending ecosystem.
I think vault tokens going back to primitive asset level to be used in other vaults is where the problem starts. This is similar, but not the same, as looping, but it makes collateral, counterparty management difficult.
One should see morpho as 3 distinct parts:
The tokens or assets, the markets, and the vaults (the tech)
Isolated stuff is tricky if you have vault, yield tokens.
sorry my first time using excalidraw LOL. Forgot to change the vault of vaults stuff to another color
Then again, even gtUSDa is in Pendle smh so there's one more loop
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