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Isolated markets in Morpho/Bend contain risk but can fragment liquidity across many pools. You might want to borrow from a market that doesn’t have enough supply. The Public Allocator fixes this: it reallocates a vault’s assets between markets on demand so your borrow can succeed. The Public Allocator is a smart contract that routes liquidity and moves assets between markets when a borrow needs them.
The Vault Owner must whitelist the Public Allocator contract for it to operate.

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Overview

The Public Allocator is callable by anyone. It can move a vault’s idle or underused supply into the market where a borrower needs liquidity, at the time of the borrow. For you as a borrower, many small pools behave like one deep pool, with isolated risk preserved.

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Borrower flow

Example: you want to borrow 1,000 WETH from the wstETH/WETH market, but that market only has 200 WETH.
  1. Borrow request: You (or your app) initiate the borrow. The system sees a 800 WETH shortfall.
  2. Allocator runs: The Public Allocator is called. It finds 800 WETH in other markets where the same vault has supply (e.g. idle or an underused rETH/WETH market).
  3. Reallocate: The Allocator runs reallocate, moving 800 WETH into the wstETH/WETH market.
  4. Borrow: The market now has 1,000 WETH; your borrow completes.
With a Bundler, reallocation and borrow happen in one transaction. You get deep liquidity in a single step.

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Curator controls: flow caps

Curators limit how much the Public Allocator can move:
  • maxIn: Max assets the Allocator can move into a market.
  • maxOut: Max assets it can move out of a market.
So liquidity stays flexible but within the vault’s risk parameters.