Call for Grants

MorphoAssociation · December 11, 2024, 7:26pm

The Morpho DAO has voted to establish a grants pilot program. The total grants pool is 200k MORPHO for this pilot round, with a submission deadline of January 1. Grantees considering larger projects are encouraged to select a small initial scope for this pilot program, and apply again in the next grants round for follow up funding for further development. The grants apply only to future work. The Morpho Association will assist in providing technical review of grant proposals, but all decisions will be made by the Morpho DAO. After this pilot program, the DAO will consider how best to scale up the process, possibly including selecting a dedicated grants committee.

All grant applications must define objectively measurable impact metrics. Grants will be funded based on which receive the most votes, with ties broken in favor of the grant with the lower funding request. 20% of an awarded grant’s budget is paid up front, 20% paid upon the completion of the work described in the application, with the remainder based on the objective metrics defined in the grant application.

For-profit applications are acceptable, but the tools funded by grants must be open to everyone (no subscription-fee gated tools).

Applicants should use the following template when applying and post their submission in this thread. After the submission deadline has completed, the Morpho Association will allow adequate time for the community to review all grants before submitting a Snapshot vote to choose which will be funded. The template below has short form fictional example content to help guide submissions.

Project Title: Morpho Borrow Optimizer

Organization name: Morpho Builders Collective

Organization website and/or social media links:

About us + prior experience: The Morpho Builders Collective is a group of developers building tooling in the Morpho Ecosystem, currently as a side project to our primary roles. We currently host a frontend which provides analytics about the Morpho Protocol, and are active Morpho users. (please feel free to include links to other portfolio projects here)

Leading Contributor(s): OneTrueKirk (please include links to Twitter, Github, etc profiles in this section)

Requested budget: 100k MORPHO

Scope of Work: Create a tool which allows borrowers on Morpho to automatically rebalance between pools in pursuit of the lowest interest rate. The tool will enforce a max LTV, and ensure that only a whitelisted set of oracles can be used, so that borrowers cannot be wrongfully liquidated. This is suitable for users who want to take out longer term loans, whether to farm in DeFi or pay for real life expenses, while minimizing their costs. The vault will be deployed only on Base where the cost of rebalancing will be small. The vault will charge a 10 bips annual fee on AUM, which will cover the costs of rebalancing and return some revenue to the Morpho Builders collective.

Benefit for the Morpho Ecosystem: Borrowing on Morpho can be more complicated than protocols like Aave or Compound due to the many choices available to borrowers. Our tool would simplify this experience for borrowers who have longer term positions and a low tolerance for liquidation risk, broadening the pool of people who will use Morpho.

Metrics: Achieve 5M TVL using the tool

Timeline: Two months for development, testing, and integration into the existing Morpho Builders Collective frontend

Future directions (optional): If this tool sees adoption, we would like to expand to a more sophisticated v2 which can add features like rebalancing between different stablecoin debt types to further optimize costs.

quntangled · December 16, 2024, 3:42am

Project Title: Morpho Borrow Optimizer

Organization Name: Untangled

Organization Website and/or Social Media Links:

Website: Untangled
Twitter: @UntangledFi
LinkedIn: Untangled Finance

About Us + Prior Experience

Untangled is a credit investment infrastructure builder. Our products include Untangled Pool, a private credit onchain securitisation platform, Credio, a decentralized risk oracle, and Untangled Vault , a non-custodial vault protocol built on ERC-4626 and Safe wallet standards.

Untangled is backed by Fasanara Capital, an institutional asset manager based in London focusing on fintech private credits., Our team has extensive experience in credit risk management, RWA, lending protocol smart contract development. Some highlighted work include:

Launched Karmen Pool, a tokenized private credit pool on Celo for a French SME lending fintech
Developed stablecoin risk management framework and a Credio risk oracle streaming machine learning model predicting stablecoin depegs and zero knowledge proofs directly to smart contracts
Launching a yield coin backed by tokenized money market funds and ultra short duration private credits leveraging Untangled Vault technology. We have reached out to Morpho Labs team to become the curator of a vault and to whitelist this yield coin.

Contributors:

Manrui Tang: (Linkedin) Cofounder, TradFi and worked in blockchain since 2017, ex-Big 4, with degrees from Imperial College and LSE.
Quan Le: (Linkedin) Cofounder, TradFi and worked in blockchain since 2017, ex-Big 4, degrees in applied finance and investment.
Tan Phan: (Linkedin) Core developer of Untangled Vault, CS graduate from Hanoi University of Science and Technology.
Duong Nguyen: (Linkedin) Core developer of Credio contracts and simulation engines, Applied maths graduate from Hanoi University of Science and Technology.
Tuan Do: Developer of pyEVM environment, BE and DevOps, Applied maths graduate from Hanoi University of Science and Technology.
Minh Nguyen, (Linkedin) Developer of Untangled Pool, Auditor of Untangled Vault, Applied maths graduate from Hanoi University of Science and Technology.

Duong and Minh won the Ethereum Vietnam Buidlathon (2024), presented by Vitalik Buterin.

Tan, Duong won Chainlink Hackathon (2023) for privacy-preserving DAO voting.

Requested Budget: 75k MORPHO

Scope of Work

Why Morpho Borrow Optimizer

As a potential curator, a borrower and a builder on Morpho stack we recognize the advantages of the curated vault model but do concur with the finding in your sample proposal that, with markets spreading over 7 pages long, each with its own set of parameters, it would be difficult for a general borrower to choose the optimal one(s) and stay on top of the borrowing throughout its life. This could explain whilst some markets have high utilization rates, the overall utilization across the protocol is only around 40%.

The Morpho Borrow Optimizer will simplify the borrowing experience on Morpho by automating borrowing and monitoring decisions, leveraging Untangled Vault technology integrated with Safe and Credio, our risk oracle. It will optimize borrowing costs, mitigate liquidation risks, and provide borrowers with real-time monitoring and automated risk management.

Key deliverables:

Smart Borrowing Accounts: Borrowers will open smart borrowing accounts using Untangled Vault (with Safe integration). These accounts will track collateral, loans, and borrower-defined permissions for automated actions (borrowing, rebalancing, anti-liquidation).
Borrow Optimization Engine: Using machine learning and optimization algorithms, the engine will identify the most efficient borrowing route across Morpho markets. Factors considered include:

Collateral type and amount.
Interest rate mechanism, liquidation penalties, oracle risk, and market liquidity.
Borrower constraints, such as cost limits, risk tolerance and borrowing amount.

Simulation of borrowing terms for transparency and approval before transactions are executed.
Market Monitoring System: The system will continuously monitor Morpho markets for:

interest rates.
Liquidation risks due to price trajectories of collaterals.
Oracle risks or changes in market conditions including risk alerts from Morpho front end.
Borrowers will receive actionable insights and alerts to minimize risk.

Automated Rebalancing and Anti-Liquidation Bots: Bots will:

Rebalance loans across markets to optimize costs.
Execute anti-liquidation actions, such as topping up collateral or reducing debt.
All actions will follow borrower-defined permissions enforced via Safe’s Zodiac Role Modifier module.

Simulation and Agent-Based Modeling: The system could use agent-based modeling to optimize borrowing and rebalancing recommendations.

This solution will help Morpho borrowers avoid the complexities of navigating multiple markets, while reducing costs and minimizing liquidation risks.

Architecture and workflows

(1) Borrowing Account Creation: Borrowers open smart borrowing accounts (Untangled Vault technology, integrated with Safe). Borrower deposits collateral into the smart account.

(2) Model development

a. Borrow route optimization

Objective: Minimize borrowing costs (interest rates + transaction costs + potential penalties).
Constraints include:
- Ensure collateral amount meets the minimum LTV ratio for the selected market.
- Avoid markets with insufficient liquidity for the desired borrowing amount.
- Minimize risk exposure to liquidation.

b. Market monitoring

Interest Rate Monitoring:

Compare the borrower’s current interest rate with rates in alternative markets.
Trigger a rebalancing recommendation if savings exceed a threshold (e.g., 5% lower rate elsewhere).

Liquidation Risk Monitoring:

Calculate real-time collateral health (collateral value relative to loan amount).
If collateral-to-loan ratio approaches liquidation thresholds, suggest:
- Adding collateral.
- Reducing debt.
- Rebalancing to a safer market.

(3) Deployment: Once the model is selected it will be deployed to production together with a verification file using ezkl library.

(4) Oracle Data Update: A real-time data pipeline is fed to the model which in turn drives the model outputs. The outputs are updated to a custom oracle adapter contract

(5) Bot Actions:

The bot (e.g., liquidator-js) monitors the Oracle adapter contracts and identifies a position at risk
Prepares a transaction to rebalance or anti-liquidate actions.

(6) Credio Safe Module Validation:

The bot submits the transaction to the Credio Safe Module.
The module verifies the transaction against Oracle data (e.g., risk score > threshold) and zero-knowledge proof

(7) Smart Account (Safe) Execution:

The module forwards the validated transaction to the Safe wallet.
The Safe wallet executes the transaction, ensuring role and permission policies are followed.

Benefit for the Morpho Ecosystem

Borrowing on Morpho, while offering flexibility and market efficiency, can be more complex than traditional protocols like Aave or Compound due to the many market options available. This complexity may discourage borrowers with longer-term positions and low liquidation risk tolerance.

In summary, The Morpho Borrow Optimizer simplifies the borrowing experience by:

Identifying optimal borrowing routes tailored to individual borrower constraints.
Continuously monitoring and mitigating liquidation risks, even after the borrowing transaction.
Automatically rebalancing loans across markets to minimize costs and maximize security.

Metrics

The primary metric for success will be achieving $5M TVL through borrowers using the Morpho Borrow Optimizer within six months of launch.

Timeline

The project will be completed in two months, including development, testing, and integration into Untangled’s frontend. Key milestones:

Month 1:

Finalize design and specifications following stakeholder consultation
Develop Borrow Optimization Engine.
Implement Market Monitoring System.
Curate/develop bots for rebalancing and anti-liquidation.

Month 2:

Integrate the solution into Untangled’s existing frontend.
Simulate borrowing workflows.
Final testing and debugging.

Future Directions

Credio aims to be a public good that links machine learning model inferences to smart contracts in an automated, privacy preserving manner via zero knowledge proof. As it enables borrowing optimisation model outputs to interact with Morpho it could also support other use cases:

Improve performance:

The optimizer will be further improved with future iterations e.g., in terms of model efficacy, system latency and user experience.

Other use cases e.g,:

Support rebalancing between different stablecoin debt types to further optimize costs and reduce exposure to price volatility.

Calling on modellers:

Credio is designed to decentralize model building to a community of data scientists and rating agencies. The best model will be chosen through a competition and a part of the service fees is to be shared to modellers.
Zero-knowledge model proof ensures that outputs come from trusted models without revealing their secrets, thereby protecting the modeller’s intellectual property.

Tenor_Labs · December 18, 2024, 7:26pm

Project Title: Fixed-rate market toolkit purpose-built for Morpho curators

Organization name: Tenor Labs

Organization website and/or social media links:

About us + prior experience:

Tenor Labs is a development company building fixed rate tools for curators within the Morpho ecosystem. More specifically, Tenor Labs creates a protocol enabling curators to deploy fully onchain fixed rate lending order books on top of pre-existing Morpho money markets. The protocol features a novel concentrated liquidity Interest Rate AMM, mitigating the inefficiencies of traditional fixed rate protocols.

The team has experience building in the DeFi space having previously worked at Notional Finance and Morpho Labs. The team is very familiar with the Morpho Blue codebase and the Morpho ecosystem more broadly.

Past projects/achievements:

The team previously built open sourced analytics dashboards and risk tools for the Morpho Ecosystem (e.g. Analytics dashboards for Morpho Optimizers).
The team also secured the top prize in the third cohort of the Uniswap Hook Incubator for its Interest Rate AMM project built on top of Morpho markets.

The team’s core contributors are currently building the Tenor protocol on a full-time basis. The project has been under development for the past five months. To date, Tenor Labs has been entirely bootstrapped, with no external funding.

We decided to build on the Morpho stack for the following reasons:

The Morpho money market codebase is immutable making it attractive to build upon for third party developers.
The curator ecosystem on Morpho is strong and growing.
Morpho has been supportive of third party developers building on top of its stack, encouraging positive sum outcomes.
We align with Morpho’s mission of creating open, efficient, and resilient financial infrastructure.

Leading Contributor(s):

Pierre-Yves Gendron (Twitter)
Hugo Boisselle-Morin (Github, Twitter)
David Dallaire (Github, Twitter)

Requested budget:

35k MORPHO

This grant will partly cover for the expenses related to the protocol’s development and audit. More specifically the auditing of the Morpho Market Adapter contract.

Scope of Work:

Our goal is to provide curators with a set of tools to deploy fixed rate bulletin boards-style order books on top of existing Morpho Markets. The protocol and tools will be accessible to all curators and will not be gated by any means. The protocol will offer the following features:

Fixed rates: Matching of borrowers and lenders at fixed interest rates for any durations (e.g. 1 month, 2 months), bringing rate predictability to users who seek it.
P2P matching: The protocol will enable lenders and borrowers to get matched p2p at fixed rates, effectively cutting the interest rate spread of utilization based money markets. This is somewhat similar to Morpho Optimizers, but for fixed rates. The protocol implements a concentrated liquidity Interest Rate AMM similar to Uniswap V3 but uses interest rate ticks instead of price ticks. The Interest Rate AMM also natively supports limit orders.
Term structure: The protocol creates the tools necessary for curators to create the term structure on top of any Morpho money market by facilitating the deployment of pools of different maturities. The protocol is also built with a programmatic collateral framework to facilitate rolling between different maturities and the money market.
Yield bearing liquidity: The unmatched liquidity in the different fixed rate pools is natively deposited in Morpho money markets such that it is yield bearing, creating a better UX for LPs.
Morpho vaults as collateral assets: Curators can use Morpho yield bearing vaults as collateral assets. For example, a curator could create a market with USDC as the loan currency and use a WETH yield bearing vault as the collateral asset. This is beneficial to curators and Morpho as the entirety of Tenor’s TVL flows down to Morpho vaults/markets.
Governance minimized: Tenor implements a custom interest rate AMM requiring no governance parameters as users can set their preferred rates directly in the AMM.

One can interact with the devnet demo here (ctrl + Q to fund a test account).

Benefit for the Morpho Ecosystem:

Expanding the feature set for Morpho curators: Expand the feature set for Morpho curators by enabling them to deploy fixed rate products on top of their existing vaults. This enables curators to serve a broader set of users and support a broader set of use cases (e.g. RWA markets, OTC markets).

Expand the offering to Morpho users: Morpho curators will be able to offer a differentiated offering (fixed rates with p2p matching) to their end users, creating a competitive advantage for the Morpho ecosystem compared to other lending protocols.

Additive to Morpho’s ecosystem: The entirety of the TVL in Tenor markets flows down to Morpho vaults/markets. Tenor markets are purpose built on top of the Morpho stack.

Metrics:

The main objective of this project is for two independent curators to launch Tenor markets on top of their existing Morpho vaults and for those curators to attract $5M in additional TVL to their Morpho Vaults/Markets via their Tenor deployments.

Here are the main milestones for our project:

Milestone 1: Full Testnet deployment;
Milestone 2: Completed audits (conventional audits + security contest + FV);
Milestone 3: Two curators launching Tenor markets and reaching $5M TVL deposited in their underlying Morpho Vaults.

Timeline:

One month for testnet deployment. Three to four months for continued smart contract and UI development, testing, & audits. This grant will partly cover the expenses related to the protocol’s development and audit.

Future directions (optional):

If Tenor sees adoption from curators, the protocol could be deployed across multiple Morpho instances on different chains. If the Tenor integration is successful, a subsequent version of the protocol could also be developed.

Lagoon · December 19, 2024, 11:48am

Project Title: Morpho integration into Karpatkey DeFi-Kit

Organization name: Lagoon

Organization website and/or social media links:

Twitter
Website

About us + prior experience:

Lagoon is a decentralized asset management platform that allows asset managers to create customizable vaults. Built on Gnosis Safe, Lagoon offers a flexible infrastructure for executing DeFi strategies. Lagoon vaults are natively cross-chain, enabling multi-chain deposits and strategies.
We plan to integrate as many protocols as possible into the DeFi kit. This will provide users with access to more strategies, liquidity sources, and yield optimization opportunities, all while maintaining their security.

Leading Contributor(s):

Rémi Foult
Role: Project Manager, he will oversee the project and provide expertise as first user and technical advisor.
Background: Remi is an engineer and DeFi asset manager with experience as the lead blockchain developer at Deloitte and Natixis. Since 2019, he has been managing DeFi funds, including the Ethereum France treasury, and has managed up to $80M on-chain.

Arnaud Gouriou
Role: CTO, he will lead the technical implementation.
Background: Arnaud has 12 years of experience in development, DevOps infrastructure, and software architecture for SaaS, previously working with ConsenSys.
Github

Guillaume Dupont
Role: Lead Developer
Background: Guillaume has served as a lead developer at Amphor with smart contracts securing more than $230M of TVL.
Github

Julien Francais
Role: Developer
Background: Julien is a highly skilled smart-contracts developer who frequently ranks in the top 10 of Node Guardians’ gas optimization competitions.
Github

Thao Nguyen
Role: Developer
Background: After graduating from School 42 Thao started her career as a full-stack developer in the French start-up ecosystem.

Requested budget:

4k MORPHO

Scope of Work:

While the Morpho App is already available in the Gnosis Safe UI, this proposal focuses on enhancing integration through the DeFi Kit. The DeFi Kit standardizes and secures interactions with DeFi protocols by defining actions tailored to each protocol’s particularities. It works seamlessly with Zodiac Roles, a Safe module that assigns custom roles to addresses, restricting transactions to specific permissions. This combination ensures secure treasury management through well-defined authorizations. The DeFi Kit simplifies protocol understanding thanks to its catalog of supported actions and functions. Together, they provide a robust framework for safeguarding and automating fund management.

The integration will make MORPHO directly accessible within the Safe ecosystem. By connecting MORPHO to Safe, asset managers can access a broader range of DeFi strategies without leaving the Gnosis Safe interface. This integration simplifies the process of lending, borrowing, and liquidity management, while maintaining the security and control that Safe users rely on.

Benefit for the Morpho Ecosystem:

Integrating MORPHO directly within the DeFi-kit will significantly expand its user base, especially among institutional investors and asset managers who prioritize high security and full control over their assets. By offering seamless access to Morpho’s advanced liquidity aggregation and yield optimization tools, the integration will enhance the usability and appeal of Morpho’s platform, driving TVL and adoption to Morpho. The Safe TVL is currently over $122b and represents a real opportunity for Morpho.

Lagoon’s cross-chain functionality will enable users to access liquidity across multiple blockchains, expanding the available liquidity pools. This broader access will attract more users and enhance lending and borrowing opportunities, boosting Morpho’s liquidity and solidifying its position in the DeFi space. Increased liquidity and wider user engagement will drive growth in Morpho’s ecosystem, reinforcing its role in the DeFi space.

Metrics:

Successful integration of Morpho for ETH and BASE users
Total value locked (TVL) from Lagoon and Safe ecosystem: Target of $20M, which currently represents 0.017% of Safe’s total TVL (conservative target)
Transaction volume: This metric primarily quantifies the overall volume processed through the Zodiac role modifier (7,000 unique addresses)
Increase of active users on Morpho

Timelines:

Integrating Morpho into Karpatkey DeFi-Kit:

Duration : 2 months

Deliverable : Integrating Morpho on ETH and BASE

Lagoon will assess the optimal way to integrate Morpho into the DeFi kit. Collaboration with a Morpho team member may be required to ensure alignment and to reach the most suitable solution.

TheBigWhale · December 24, 2024, 9:18am

Project title : Create a new subscription business model, based on a Morpho Vault.

Organization Name : The Big Whale

Organization website and / or social medias

https://en.thebigwhale.io/
x.com
https ://en.linkedin.com/company/the-big-whale

About Us + Prior Experience

The Big Whale is a crypto expert business information platform that provides independent, high quality crypto and data insights for professional investors, financial actors, bankers, family offices, and crypto actors. (BNP, Société Générale, VISA, Mastercard, Coinbase, Circle, Kiln, Crédit Agricole to name some of our clients…)

We also address about 25K retail subscribers in Europe, that have the possibility to pay a yearly subscription to unlock all our content.

Our goal, as developed in “objective”, is to build a fully on-chain subscription model that revolves around users having to deposit into a Morpho Vault to be subscribed, rather than the classic subscription model of paying each year with a credit card.

The Big Whale has been covering Morpho’s approach to decentralized lending, highlighting its key features such as permissionless market creation, efficiency gains, new business opportunities for DeFi actors and Curators, or oracle-agnostic pricing.

https ://en.thebigwhale.io/article-en/compound-aave-morpho-how-lending-is-reinventing-itself-in-defi
https ://en.thebigwhale.io/article-en/aave-vs-morpho-the-great-lending-match
https ://en.thebigwhale.io/article-en/paul-frambot-morpho-labs-aave-is-a-bank-whereas-morpho-is-an-infrastructure-for-banks
https: // en.thebigwhale. io /article-en /paul-frambot-morpho-labs-aave-is-a-bank-whereas-morpho-is-an-infrastructure-for-banks
https:// en.thebigwhale. io/article-en/ morpho-blue-ready-to-bring-defi-to-the-real-world

Our last report, that was about the DeFi and TradFi convergence was sponsored by the Morpho Association and can be found here

https ://en.thebigwhale.io/reports/defi-tradfi-la-grande-convergence

Note : as an independant business information company, The Big Whale ensures a strict separation between editorial content and the rest of the operations.

Editorial independence is maintained at all times, guaranteeing impartial reporting and prioritizing readers’ trust.

Leading Contributor(s):

Alexandre Gabadou Head of Product - https ://www.linkedin.com/in/alexandre-gabadou/
Grégory Raymond : Head of Research https ://x.com/gregory_raymond
Raphaël Bloch Head of News : https ://x.com/Raph_Bloch / https: //www. linkedin. com /in/raphael-bloch-/
Dimitri Granger CEO : https ://www.linkedin.com/in/grangerdimitri/
Hugo PANCZAK (Head of Crypto) - https ://x.com/ZakLaMedaille / built https ://whiteloop.capital
Arthursw.eth (Product Manager) https:// x. com/Arthurws14
Stakehouse finance (Curation/vault parameters) : https:// www.steakhouse.financial/

Requested Budget:

20K MORPHO

Scope of Work

Our Objective :

At The Big Whale, we acknowledge how Morpho’s permissionless infrastructure can be leveraged as a back-end to build innovative new products that benefits more end-users compared to both Web2, or other Web3 not flexible DeFi solutions.

We propose to use Morpho’s protocol to build a fully on-chain subscription model leveraging the vault’s infrastructure as a back-end

Instead of charging a flat subscription fee, subscribers will deposit funds (USDC- Base, curated by Steakhouse) into a Morpho vault to access paywalled content

Indeed, the immutable and governance-minimized approach of Morpho’s stack ensures full ownership , flexibility and overall control over the infrastructure, which are key to reinforcing media’s independence.

Context

In today’s media landscape, subscription is considered the best revenue model to build trust and independence. However, many readers are reluctant to pay monthly or annually to support their favorite media outlets. This has forced media companies to rely on SEO-driven strategies and paid content models. These approaches prioritize maximizing page views and advertising revenue over delivering high-quality, in-depth content that genuinely benefits readers.

This dynamic creates a fundamental misalignment between the interests of readers—seeking reliable and valuable information—and media organizations, which are pressured to chase clicks and visibility only

Advantages for Subscribers:

Productive Subscription:

Deposited funds generate yield through Morpho’s lending markets, providing subscribers with a financial return while enjoying premium access.

Liquidity and Flexibility:

Subscribers can withdraw their initial deposit plus accrued interest at any time, effectively “unsubscribing” without losing money, unlike traditional subscription models where payments are non-refundable.

Empowerment:

Subscribers become stakeholders in the system, aligning incentives with both the media and the DeFi ecosystem by supporting decentralized finance.

Advantages for the Media:

Aligned Incentives:

Media organizations are paid directly by their readers via performance fees on the yield generated from subscriptions. This removes the dependence on ad revenue.
A subscription model aligns the media’s success with delivering value to its readers, as income scales with user satisfaction and retention.
The vault deposit token can be used as a governance token on certain topic, giving the power to subscribers of owning their medias, and be at the center of it

Alternative to the problem of web2 subscription :

Morpho’s immutable and governance limited approach offers a permissionless, flexible, and scalable alternative to the current subscription model, allowing in the case of media for more censorship resistance, and to have independence and have control over it’s financial streamline

Full transparency to subscribers and readers

This on-chain subscription model ensures full transparency in financial flows.
Subscribers can verify how their deposits are being used, track the yield generated, and see the performance fees earned by the media.
This openness builds trust between readers and media companies

Benefit for the Morpho Ecosystem:

The subscription model channels deposits directly into Morpho Base’s instance, increasing TVL.
Fits the “DeFi Mullet” play by showcasing how Morpho can be used as an infrastructure tool to build new financial applications on top.
Strengthen Morpho DAO’s visibility and user engagement by leveraging TBW’s active user base (9M monthly reach / visibility to decision makers in tradfi).

Metrics:

$100K fees generated for the media through curator fees (in order to showcase to other media companies how it is possible through Morpho’s Vaults to monetize audience in a new way that doesn’t rely on web2 models such as SEO / paid content)
1000 unique deposit addresses of at least 500$ or 4M TVL

Timeline:

This breakdown is done in the form of User Stories, which include discovery, design, implementation, testing and the move to production.

Phase 1: Wallet Connection (1 month)

Allow a user to connect and view his Web3 wallet on The Big Whale (TBW) Web-App
Allow a user to receive TBW Newsletter when he has a connection with his Web3 wallet

Phase 2: Setup and Web-App integration (1.5 month)

Allow a user to stake/unstake USDC on TBW Web-App and Morpho app
Allow a user to access TBW premium content by holding tbwUSDC (deposit token)
Allow a user to see a dashboard with users subscription, current vault exposure, current APY inside TBW Web-App

Future Directions

Provide a smart-wallet for our non-crypto user
Enable On-Ramp in order to fund user’s smart wallet
Deploy a similar model that allows for ETH deposit as an alternative to USDC, allowing subscribers to keep exposure to the market.
Create a second vault that would take the deposit token as collateral, in order to allow subscribers to “borrow against their subscription”
Extend this subscription model to other medias
Use the vault’s deposit token as a governance token for the Guardian address (https ://forum.morpho.org/t/steakhouse-metamorpho-vaults-are-upgrading-their-guardian-setups-to-fully-trustless/527)
Use the vault’s deposit token as a governance token for media governance.

Yieldstream · December 27, 2024, 8:12am

Project Title: Lending Optimizer

Organization Name: Yieldstream

Organization Website and Social Media Links

Website: Yieldstream.net (under construction)
Twitter: @0xyieldstream

Contributors

Benjamin Scherrey: Lead developer of the Yieldstream protocol

Sajal Kayan: (@sajal) Software engineer with an active role in the development and maintenance of Yieldstream

Eike Caldeweyher: Software engineer with an active role in the development and maintenance of Yieldstream.

Angelos Gkrous: (@Rohmanuseth) Business operations and strategy at Yieldstream.

About Us and Prior Experience

At Yieldstream, we envision a completely trustless decentralized finance (DeFi) universe—a world where anyone can benefit from the efficiencies and composability of the DeFi ecosystem without relying on centralized entities. This vision drives our development of the Yieldstream aggregator: a decentralized yield aggregation protocol built on top of a decentralized lending platform.

Our team brings diverse expertise from software engineering, academia, and business. Drawn to the limitless possibilities of DeFi, we transitioned to this space to build next-generation, trustless DeFi infrastructure that empowers individuals to control their wealth. Morpho provides the ideal base layer for achieving our goals.

Requested Budget

20k MORPHO

The Yieldstream Project

Overview

A decentralized yield aggregator built on top of Morpho.

Yieldstream’s yield aggregation mechanism operates entirely on-chain. Written in Vyper and adhering to the ERC-4626 standard, Yieldstream enables users to launch vaults utilizing their chosen lending pools from an approved registry. Vault owners can dynamically add or remove markets from the registry.

Vault rebalancing is fully decentralized and executed on-chain. Anyone can submit rebalancing requests to a Yieldstream vault, provided the proposal improves returns compared to the current allocation.

How Rebalancing Works

Submission

Strategists send a rebalancing request to a Yieldstream vault, specifying the desired reallocation of assets.

On-Chain Evaluation

The vault calculates APY improvements, considering potential fluctuations caused by the rebalancing itself. These calculations leverage the interest rate curves of underlying markets to estimate post-rebalancing yields.

Execution

If the request meets all requirements, the vault reallocates its assets accordingly.

Strategist Rewards

Strategists with successfully executed proposals earn a share of the vault’s yield. The reward rate is determined by the revshare rate, which can be configured and updated by the vault owner.

Risk Management: Liquidity Caps

Liquidity caps impose risk management guardrails during rebalancing. Caps are set on an adapter-by-adapter basis and define the maximum percentage of the vault’s total value (TVL) allocable to a specific market. These constraints ensure proposals adhere to predefined limits.

Example Use Case

A vault owner operating a USDC vault with exposure to BTC/USDC, ETH/USDC, and MKR/USDC markets might:

Limit exposure to the MKR/USDC market to 20% of TVL to mitigate volatility risk.
Allow unrestricted allocations to BTC/USDC and ETH/USDC markets.

Strategists must ensure proposals comply with these constraints, and the owner can adjust caps as market conditions evolve.

Circuit Breaker Mechanism

How It Works

The protocol monitors the total value recorded in an external market compared to vault deposits. If the external market value drops below the deposited amount, the invariant is considered broken, signaling potential malicious activity or critical failure.

Response

The protocol immediately switches the affected market to recovery mode.
In recovery mode:

No further deposits are allowed.
Remaining funds are queued for withdrawal.
Interacting users trigger automated withdrawals, securing funds back in the vault.

This mechanism ensures rapid, automated responses to safeguard user assets.

Architecture and Workflows

System Architecture Overview

Smart Contracts

Vault Contracts: Manage deposits, withdrawals, and rebalancing operations (ERC-4626 standard).
Rebalancing Logic: Handles asset reallocation based on strategist proposals with guardrails like liquidity caps.
Circuit Breaker Mechanism: Monitors invariants and initiates automated recovery actions to protect user funds.

Registry Module

Maintains approved markets for lending and borrowing.
Allows dynamic updates by vault owners.

Market Monitoring System

Continuously evaluates interest rate curves and external conditions for rebalancing.

Frontend Integration

Provides a user-friendly interface for vault management, performance tracking, and setting risk parameters.

Data Analytics Layer

Offers insights into vault performance, strategist rewards, and risk metrics via Dune Analytics dashboards.

Workflow for Rebalancing

Proposal Submission

Strategists submit rebalancing requests specifying proposed asset allocation.

On-Chain Evaluation

Smart contracts calculate projected APY improvements and validate compliance with liquidity caps.

Approval and Execution

If requirements are met, the vault reallocates assets accordingly.

Strategist Rewards

Successful proposals earn strategists a share of the vault’s yield, governed by configurable rates.

Key Deliverables

Smart Contract Development

Vault contracts (ERC-4626).
Rebalancing logic with integrated guardrails and circuit breakers.

Market Monitoring System

On-chain tools for APY calculations and interest rate analysis.
Continuous risk monitoring mechanisms.

Frontend Integration

UI components for vault management and strategist engagement.

Documentation and Analytics

Comprehensive user and developer guides.
Dune Analytics dashboard for tracking performance metrics.

Testing and Audits

Rigorous smart contract testing.
Independent code audits for security and trustworthiness.

Benefit for the Morpho Ecosystem

Yieldstream enhances Morpho’s ecosystem by:

Bringing the entire yield aggregation process on-chain.
Building a fully trustless aggregation protocol.
Introducing circuit breakers to improve asset safety and risk management.

Metrics

Achieve $5M TVL in vault deposits within six months.
Deploy at least three vaults across different market configurations within two months.
Execute 50+ successful rebalancing proposals in the first three months.

Timeline

Month 1

Finalize design and specifications following stakeholder consultation.
Develop Borrow Optimization Engine.
Implement Market Monitoring System.
Curate and develop bots for rebalancing and anti-liquidation.

Month 2

Integrate the solution into Yieldstream’s frontend.
Simulate borrowing workflows.
Conduct final testing and debugging.

Roadmap

Yieldstream’s infrastructure will support diverse use cases in the DeFi yield space, leveraging its composability. Future directions include:

Option-Based Yield Strategies

Accumulation of options on BTC and ETH using aggregated yields.

Dollar-Cost Averaging Strategies

Systematic accumulation of specific assets (e.g., cbBTC or ETH).

Liquidity Pool Mobilization

Optimization of idle liquidity in platforms like Uniswap and Balancer.

Yield-Bearing Portfolios

Development of diversified, yield-generating portfolios utilizing Morpho lending pools.

Yieldstream will continuously optimize its platform and release new codebase versions to support evolving use cases.

itbresearch · December 27, 2024, 8:34pm

Project Title: Morpho Institutional Risk Radar

Organization name: IntoTheBlock (ITB)

Organization website and/or social media links:

Websites and Apps

ITB Analytics: https://app.intotheblock.com/

ITB Quant Platform: https://intotheblock.finance/

ITB Risk Radar: https://defirisk.intotheblock.com/

Socials

Twitter/X: x.com

Medium: IntoTheBlock - Medium

About us + prior experience:

ITB was founded in 2019 and is one of the largest crypto data providers. We have support in our app for custom analytics for more than 10 chains (Bitcoin, Ethereum, Optimism, Arbitrum, Base, Tron, Avalanche and more) 1000+ coins, 5000+ NFT collections, and 20+ DeFi protocols, as well as other traditional finance metrics.

IntoTheBlock has been deeply involved in DeFi over the past three years, pioneering the institutional DeFi space. Through our DeFi Quant Platform (https://intotheblock.finance/), over 30 of the largest crypto institutions have deployed nearly $3B in assets via sophisticated, non-custodial strategies aided by our risk management tools. These strategies are tailored to each institution’s risk profile and would have not been possible without our extensive focus on risk management.

ITB has more recently also developed the Risk Radar platform (https://defirisk.intotheblock.com/), modeling economic risk dashboards for protocols such as Aave, Curve, Ethena and Euler. This serves as a transparent hub creating a baseline for risk management across DeFi.

Leading Contributor(s): ITB Research and Engineering teams (IntoTheBlock - On-Chain Crypto, DeFi & NFT Analytics)

Requested budget: 15k MORPHO

Scope of Work: The project will create and integrate a dashboard of risk signals for Morpho into ITB’s Risk Radar platform. The Risk Radar aims to be a central hub for users to access risk information for popular protocols across the DeFi ecosystem. The Morpho Risk Radar dashboard will be freely available to the public and will allow users to review Morpho economic risks in near-real time and download raw data for personal modeling use cases. The concept of the Risk Radar as a central risk hub means that users will not only be able to compare risks across similar protocols, but also evaluate strategy-level risk in a holistic manner.

The grant request would cover the first phase of the project that would encompass creating 14 indicators (listed below) and would cover Morpho instances on both Ethereum and Base blockchains. If approved by voters, these indicators ITB’s engineering team would begin work to launch these indicators within Q1 of 2025. In conjunction with the development of the first phase of indicators, the ITB Research team will submit a second grant application for remaining indicators (currently estimated at 13) and support for other chains in a proceeding grant round. We believe this will build long-term alignment between the ITB and Morpho teams.

Risk Parameter	By Protocol/Vault/Market	Sub-Category	Description	Visualization	Why is it Useful?
Collateralization	All	Borrowing	Ratio of borrows to collateral	Line	Tracks the health of loans and protocol’s overall leverage
High Risk Loans	All	Borrowing	Value of loans within 5% of liquidation threshold	Line and stacked line (showing % considered as high risk)	To understand exposure to high risk loans and anticipating future liquidations
Collateral Volatility	All	Borrowing	30 day rolling volatility of collateral prices	Line	Allows borrowers to gauge liquidation risks of collateral types before using it for loan
Whale Credit History	All	Borrowing	Tracking large depositors’ loans, repayments and liquidations	Table	If a whale has a track record of being liquidated, could be likely that gets liquidated again
Whale Exit Simulation	All	Lending	Impact that largest addresses would cause on available liquidity if they were to exit.	Bar + line (side barchart with vertical line showing available liquidity to withdraw in pool)	If large depositors withdraw their liquidity, the pool may reach a point where there is no cash available to withdraw at its worst, or sharply increase borrowing costs
Whale Supply History	All	Lending	Tracking large depositors’ loans, repayments and liquidations	Table	Whales decreasing their liquidity in a pool can impact the ability for other lenders to exit their positions. Monitoring supply whale movements help borrowers identify leading trends on potential borrow rate spikes
Liquidators Leaderboard	All	Liquidations	Leaderboard of top liquidators by the following criteria: Rewards ($) , # of Liquidations, % of Successful liquidations	Table	Gives an idea of most involved liquidators with the protocol, the dependencies on each and their overall performance
Liquidations Volume	All	Liquidations	Total value liquidated historically, daily and by token	Line Graph, stacked bar	Provides a sense of value obtained by liquidators in order to protect the protocol from bad debt
Open Liquidations	All	Liquidations	Number of positions and corresponding volume pending to be liquidated	Line	Could be a leading indicator of insolvency
Blocks Elapsed to Complete Liquidations	All	Liquidations	The time it takes for a liquidation to be completed once a position is open for liquidations	Bar chart (by collateral when at protocol or vault level)	This indicator is useful to analyze the level of asset exposure that the protocol incurs when a liquidation opportunity arises. The more blocks the opportunity is open to liquidations, the greater the chances that collateral assets can go down in price and end up not being enough to repay debts.
Vault Supply Distribution	Vault	Lending	The distribution of a vaults asset into markets	Stacked area	Provides lenders insights on where lending assets are most active and where there is the most liquidity if they want to be able to withdraw their assets easier
Vault Collateral Distribution	Vault	Lending	The distribution of a vaults collateral exposure	Stacked area	Gives lenders additional information on how much exposure they have to different assets
Vault Market Share	Vault	Lending	Shows what share of liquidity in each market is provided by a vault	Line for each market	Adds information for lenders if they have shared exposure to a collateral with other vaults

Benefit for the Morpho Ecosystem: As DeFi strategies evolve, economic risks can have varying relevancy for individual users and institutions. The Risk Radar Platform aims to create a holistic approach to economic risk management by allowing users to track their strategy-specific risks across multiple protocols and tokens in one central risk hub. With our upcoming Risk Radar Pulse launch, users will also be able to receive alert notifications on both risks relevant to their strategies as well as potential systemic-level risks.

In addition to the risk monitoring benefits that the platform provides individual users, the Risk Radar will be accessed by ITB institutional clients who have currently allocated almost $3B into DeFi using ITB risk management. These clients use the platform to perform protocol risk assessments when choosing where to allocate funds ITB’s Quant platform.

Metrics: Achieve $5M TVL from clients using ITB risk management

The Morpho risk radar will be integrated within the ITB institutional platform for clients to transparently monitor risks of depositing into different Morpho vaults
The risk radar will also be freely available for anyone to access, giving institutional-grade risk management tools to the broader Morpho community

Timeline: Deploy live dashboard with 14 indicators for public use within 3 months post grant approval

Future directions: As stated above, ITB will seek to expand the indicator offering for the Morpho Risk Radar in a second grant in a later phase. If the community sees the Risk Radar dashboard as a useful tool for managing economic risks, ITB will also seek to expand the offering to licensed fork instances of Morpho (such as the proposal by Berachain) to help cover the broader Morpho community in their daily economic risk management strategies.

yvesfracari · December 28, 2024, 10:32pm

Project Title: Morpho CoW Hooks

Organization name: bleu builders

Organization website and/or social media links:

About us + prior experience: bleu is focused on making complex blockchain interactions more accessible. We partner with companies and DAOs to build better user experiences, with most of our work centered around blue-chip protocols like CoW Protocol, Balancer, and Optimism.

CoW Hooks dApps: our latest collaboration with CoW led to developing their hook store feature (currently in beta), which extends CoW Swap’s functionality through custom hooks.
CoW Stop Loss: Stop loss orders management dApp powered by Chainlink oracles, providing automated protection against price drops.
CoW AMM Deployer: first-ever interface to create and configure your own CoW AMM.

Leading Contributors:

Pedro (GitHub) - software engineer, 2y building web3 apps, including +5 CoW projects
Fábio (GitHub) - co-founder, 4y experience in web3 analytics and development

Requested budget: 25k MORPHO

Scope of Work: Develop a series of Morpho hooks for the CoW Hook Store to streamline Morpho position management during swaps. The Hook Store enables users to add pre- and post-swap actions to their trades, and we’ll leverage this functionality to create seamless Morpho integrations. Key deliverables include:

Full integration of Morpho operations into CoW Swap
Implementation using cow-shed and weiroll tools for complex operations

We’re already working with the CoW Swap frontend team to ensure smooth implementation and maintain high UX standards. This builds on our previous hook store development experience and extends CoW Swap’s utility for Morpho users.

Benefit for the Morpho Ecosystem: CoW hooks will simplify complex Morpho operations while expanding the protocol’s features. By creating Morpho hooks on CoW Swap, we aim to enable seamless, single-transaction operations that currently require multiple steps. Some use-cases that this integration can enable:

Enter/Leave in any market without needing to have the collateral token: the current Morpho UX already has a bundler flow to enter/leave the markets with just 1 transaction. CoW hooks allow to abstract away the in/out tokens by bundling a swap together.
- Example: The user wants to borrow USDC using WETH as collateral but it just have WBTC on their wallet. They can use supply and borrow post hooks to be executed after a WBTC to WETH CoW order.
Move your liquidity from any two markets: Similar to the last one, adding pre-hooks to leave one market, swap, and enter another one.
- Example: The user had supplied USDC to borrow WETH and it wants to move to a market where it supplies DAI and borrow WBTC. It is possible to use the repay and withdraw pre hooks combined with a supply and borrow bundled with a swap of USDC to DAI.

All hooks are fully simulated through Tenderly before execution, with real-time health index monitoring across multiple hooks to prevent liquidations. This creates a safer, more intuitive experience for users.

Metrics:

All hooks reviewed by CoW team and integrated with the official CoW Swap Hook store
Achieve $1M of volume including all Morpho hooks executions.

Timeline: About 3 months for designing & implementing the hooks, following this roadmap:

UI/UX Designs (1 week):
- Transform existing wireframes into comprehensive Figma designs with:
  - Intuitive user flows with status indicators
  - Complete hook metadata integration (description, logo, info copy)
  - Streamlined position management flow with hook proxy approval
Hook Library Upgrade (1 week):
- Enhance the hook-dapp-lib package that handles CoW Swap and hook dApp communication
- Fix the current limitation where the package doesn’t provide state_diff changes from previous transactions and hooks
- Implement Tenderly hook simulation data to track state changes accurately
- Enable precise LTV calculations for current and post-hook states
Hook dApps Development (8 weeks):
- Build and deploy 4 specialized hook dApps (~2 weeks per hook)
- Integrate Morpho API for market data fetching and relevance sorting
- Implement smart LTV calculations that account for bundled hook actions
- Create flexible input options (“use all swap output” / “use all wallet balance”) for repay and deposit hooks using weiroll
- Add hook proxy (cow-shed) approval checks for position management

defidude · December 29, 2024, 11:13pm

Project Title: Builda Protocol (Yieldfunding Platform)

Organization name: Builda Labs

Organization website and/or social media links:

Builda.dev
Builda Docs
x .com/BuildaProtocol
t .me/BuildaProtocol

About us + prior experience:

DeFi Dude (myself) has been a long time advocate for Ethereum, DeFi, and decentralization as a whole, going back to 2017. Working largely on the community side of things, I’ve previously worked at Kyber Network representing and helping build out the early community as well as handling the shift to decentralized governance that oversees Kyber Network. After Kyber, I worked at Aave to help support the community and facilitate the transition from ETHLend to Aave, as well as kick off the early governance community. After Aave I’ve helped support two early stage Web3 projects pre-launch, before working on Builda Protocol.

My co-founder JC has 8 years of experience as a software developer and product designer in consumer products and FinTech - while later selling a Web3 gaming companion app in 2023. Together, we’ve previously worked on a non-profit project, ArchiveNode (x. com/archivenode), which aided 1000+ developers, researchers, and educators by giving them free access to Ethereum archive nodes at a time when it was very costly to do so, leveraging strong synergies and cooperability until the project was successfully sunset.

Leading Contributor(s):

DeFi Dude:
- x .com/DeFiDude
- t .me/defidude
JC
- x .com/delzennejc

Requested Budget: 30k MORPHO

Scope of Work:

Create a yieldfunding protocol that allows users to deposit into Morpho vaults, earn yield, and be able to direct that yield to fund early-stage projects in return for potential rewards such as token allocation, NFTs, game assets, and more. This allows projects to bootstrap what they’re building prior to launching a token and without the necessity to raise funds through a more traditional way like VC funding, which may be out of reach. By using Morpho, users can help fund these projects with “no-loss” funding, meaning, only their yield is used to fund the projects rather than direct investments. Yieldfunding is also supplementary, so projects and builders are able to utilize Builda while still taking advantage of more traditional funding routes if they choose.

Accelerating growth through early capital support, business development, as well as product development (which has already begun) will be our main focus and the majority of the work required.

Morpho Ecosystem Benefits: Utilizing Morpho vaults (ETH & USDC to start) for generating the yield will boost the overall TVL of Morpho vaults

Metrics: Achieve 5-10M TVL during our beta launch, and 50M+ TVL within a year after our main launch.

Timeline: 1-2 months for development and early testing before our first public beta launch goes live, and another 3-6 months to develop some of the deeper features as discussed below before our main launch goes live.

Future directions:

We have an internal roadmap we will be working towards, which includes building out more social support features that can assist projects with benefits like user testing, business development, social support, and more in a decentralized way. Our goal is to also integrate more vaults, and integrate benefits for both the users and projects so that they are seamlessly supported directly on the platform. The ultimate goal is to create a fully decentralized Builda Protocol, allowing the entire platform to support itself with the foundation that was built early on.

The ultimate goal for Builda Protocol (beyond a self-sustainable permissionless yieldfunding platform) is to be the number one place for early projects to get the funding they need to get off the ground, as well as the best place for users to fund what they believe in while being able to have their support not go unnoticed. To do this, we have some future directions which include:

A more fleshed out reward system for both the projects and Builda Protocol.
Creating a seamless support system for projects that can offer what “good” VCs can generally offer, including user testing, social support, business development, and more, directly within the platform.
Integrating more vaults and yield methods with Morpho and Morpho-related projects.
Offering deeper features, such as utilizing Morpho to allow the projects to create a locked yieldfunding campaign and take their funding upfront at the expense of lower yield in the long term, allowing them to access capital sooner rather than more sustainably over time.
Eventually allowing for direct capital contributions for users who are in eligible jurisdictions, similar to Echo or existing crowdfunding platforms.

Apologies for the incorrect link formatting, newer members are limited to posting 2 links in a single post.

MORE-Markets · December 30, 2024, 7:17am

Project Title: MORE Vaults

Organization name: MORE Laboratories

Organization website and/or social media links: https://more.markets, @MORE_Protocol

About us + prior experience: The MORE team has been working in the crypto space for more nearly 4 years. In our early days, we built reputation tooling and rewards programs for communities and DAOs across EVMs like Polygon, Gnosis and Ethereum as well as Solana and Flow. Since June 2024, we have been working in close collaboration with the Flow Foundation to deploy a DeFi ecosystem on that chain. We now have more than 6 months of experience working with the Morpho protocol including experimenting a fork on testnet which would facilitate undercollateralized lending through a TradFi third party. While this particular implementation is solely an experiment, we now are proficient in the functioning of the protocol as well as the maintenance of a front-end. As we deploy Flow’s core lending protocol, we are looking ahead at ways of increasing the underlying lending protocol’s capital efficiency, while offering a layer of additional abstraction on DeFi for passive lenders and long-term holders.

Leading Contributor(s):
Patrick Perlmutter Twitter, LinkedIn
Michael Rozalenok Github
Leon Lin Github

Requested budget: 35k MORPHO

Scope of Work: Expand the functionality of Morpho Vaults so that curators can post and withdraw collateral, borrow and repay loans and deploy borrowed assets into Morpho markets. By extending curation to other functions on Morpho, passive depositors can take advantage of more advanced DeFi strategies managed by professional traders and risk managers such as looping, initially. The initial deployment of these vaults will focus solely on correlated assets such as wstETH, ETH, rETH, rzETH, etc. The project’s aim is to abstract the complexity of DeFi and the myriad options offered by other looping protocols (e.g. Origami, Contango, etc.) by instead aggregating multiple loops or strategies into one or potentially many, curated ones. This new vault will lay the foundation of a protocol that operates on Morpho and consumes idle liquidity on the underlying markets to increase leverage for users as well as capital efficiency for lenders. The initial deployment can be done on Ethereum, Base, Flow or any other chain (depending on the Morpho DAO’s approval of deployments on other chains subsequent to approval of MIP-87). While a deployment of MORE Vaults on Ethereum makes the most sense to start, the ultimate decision will account for transaction costs such as loan origination, repayments, moving collateral between markets and withdrawing funds. Part of the deployment of MORE Vaults will involve whitelisting liquidity pools on leading AMMs such as Uniswap in order to support swaps between assets (specifically ones with unbonding periods) involved in the underlying strategy. Because of the focus on correlated assets, the level of risk of these early deployments is fairly mitigated.

Benefit for the Morpho Ecosystem:
The ultimate goal of the project is threefold:

improve the user experience for passive crypto holders by offering them opportunities to hold a yield-maximized, risk-minimized version of yield-bearing tokens;
Optimize the capital efficiency of underlying markets by using idle liquidity resulting in improved rates for lenders; and
Offer curators increased profitability thanks to ability to generate additional fees on yield from these strategies.

Metrics: Achieve $5M TVL in the 6 months following the launch of the first vault

Timeline: Three months for research, development and testing. In this first version a simple vault deposit and withdrawal UI will allow users to enter and exit the strategies. Participating depositors will hold a MORE vault token that accrues yield and can be burned in exchange for the withdrawal.

Future directions: As we grow TVL on MORE Vaults, we intend to:

Increase the number of curated strategies on the protocol;
Implement new strategies such as yield farming and basis farming off-protocol;
Create additional abstractions that group together strategies into indexes (e.g. moreETH, moreUSD, etc.).

just_z · December 30, 2024, 7:28am

Project Title:

ETH Discount

Organization Website and Social Media Links:

App Link: https://app.ethdiscount.xyz/
Twitter: @discountedETH

About Us & Prior Experience

ETH Discount is a fully operational app offering a seamless interface to acquire discounted ETH (fixed-income Principal Tokens) and track earnings. Usable today, it integrates Spectra and Morpho protocols, with a full product cycle from purchasing discounted ETH to redeeming wETH. It awaits its official launch, with the lack of audit being the main obstacle.

Team Members:

Z: Twitter @ justz_eth
Co-creator, Spectra App V2 designer, and communications lead at Spectra. Active in Web3 since 2017 - serial DeFi interface builder.
A_b8x1: @ a_b8x1
Co-creator, with contributions to Bancor, Harvest, and Spectra. Multi-time Superfluid hackathon winner.
PagPiotr: Twitter @ PagPiotr
Co-creator, fintech software engineer at Avaloq, and multi-time Superfluid hackathon winner.

Requested Budget

3,500 MORPHO (~$10,000)

Purpose: Fund a security audit by Halborn Security, a leading Web3 audit firm.
Breakdown: $9,300 for the audit (confirmed quote) and $700 for transaction and legal fees.

Scope of Work

ETH Discount is already live and requires no additional development funds. This request is solely to secure a Halborn audit to ensure security and build user confidence upon ETH Discount’s official launch.

Spectra pools, built on Morpho, underpin ETH Discount’s functionality, enabling discounted ETH acquisition while directing liquidity into Morpho vaults. The app uniquely delivers its service without relying much on pre-existing smart contract templates, making the audit even more critical.

Example of a Spectra pool built on top of Morpho

app.spectra.finance/fixed-rate/base:0xbd0f196071de8d7d1521c0ee53584875d2d97fc5

Benefits for Morpho Ecosystem

Liquidity Contribution:
Spectra pools built on Morpho pass ~85-95% of their TVL into Morpho vaults. ETH Discount indirectly supports Morpho by leveraging these pools to operate.
Yield Enhancement:
Activity on ETH Discount drives swaps within Spectra pools, increasing pool yields and attracting liquidity providers. This liquidity ultimately flows down to Morpho vaults.
Exclusivity Commitment:
With Morpho’s audit support, ETH Discount will exclusively integrate Spectra pools built on Morpho. The app and promotional materials will prominently include a “[Powered by Morpho]” branding.

Metrics & Milestones

Audit Timeline: ~1 month starting early 2025.
Launch Adjustments: Final tweaks completed within a week of the audit completion.
Success Metrics: Increased app usage and engagement metrics.

Future Directions

With traction, ETH Discount plans to expand into assets like USDC and WBTC, continuing to rely on Morpho-powered Spectra pools.

Extra Notes

Community Recognition: ETH Discount was showcased at Devcon 2024 to prominent figures such as dima.eth (Vitalik Buterin’s father) and Jesse Pollak (Base’s first user), who expressed positive interest in the app during the presentation.

antonttc · December 30, 2024, 8:45am

Project Title: Morpho Reallocation Agent Framework

Organization name: MonarchLend.xyz

Organization website and/or social media links:

Website: https://monarchlend.xyz/
x.com

About us + prior experience:

About Monarch:

MonarchLend is a project started in mid-May 2024, with the aim to be an interface for supplying assets directly to MorphoBlue, the core lending units within the Morpho ecosystem, being complementary to Morpho’s official UI which focuses on vaults. We believe this is an essential market that will help unleash the full potential of isolated lending, because it supports a wider range of user profiles that might be missed by vaults or any “pooled strategies”.

The platform has evolved and now has many features such as reallocation, and focuses on automation of fully customizable positions. We achieved this by building the first version of the “MonarchAgent” (v1) contract, which is the minimum contract users can authorize to reallocate lending positions among their pre-approved markets. This feature is recently live in beta on Base.

Contributors

Anton Cheng

Solo builder of MonarchLend. Senior Solidity developer and security bounty hunter. Built major DeFi option protocols since 2020 including Opyn Gamma, Squeeth, Lyra V2, and an independent project Grappa Finance. Former developer at Opyn and Lyra. Current MorphoDAO delegate.

Shao
Senior Solidity Engineer with 3+ years of DeFi development experience. Previously served as senior smart contract developer at Perpetual Protocol and developed Cruie Protocol. (Github)

Kei
Senior UI/UX Designer with 5+ years of experience in crypto, specializing in DEX and wallet interface design.

Leading Contributor:
Anton Cheng
X: x.com

Github: antoncoding (Anton Cheng) · GitHub

Requested budget: 27K MORPHO

Scope of Work: We propose to build a new version of the MonarchAgent contract (V2), with a more extensible architecture, along with other infrastructure needed to support a wider range of “agents” that help optimize yields for all types of suppliers on MorphoBlue.

The project can be broken down into:

Smart Contract: Design, develop and audit the MonarchAgents V2 contract with the following objectives:
- An extensible architecture with hooks that handle all types of “on-chain constraints” beyond the caps in V1
- Develop the first set of hooks users can efficiently configure to customize risks
- Highly optimized for L2: compress calldata to optimize agent operation costs
- Cross-chain: Make sure the helper contract can be extended to suit cross-chain strategies (reallocating between different L2s)
Frontend: Improve the current MonarchLend.xyz interface while keeping everything open source, and achieve the following objectives:
- Allow users to authorize and set up complex constraints, and choose among different agents to help optimize risk/yield profiles based on those settings
- Allow users to see live stats and status of agents, and easily manage agent access
- Transparency: A dedicated webpage that allows users to compare agent performance based on on-chain history of utilizing strategies with identical constraints, using real money, aka, live benchmarking which agent is making the most money with real money deposited.
- UI/UX: Design of above objectives
Backend:
- Indexer + public API to get agent data
- Implement a Python framework for builders to easily build and run agents
- Notification API: Allow users to set up Telegram chats to receive notifications about their position changes

We will focus on achieving all these objectives on Base.

Benefits for the Morpho Ecosystem:

For everyone: More direct liquidity into Morpho markets without the need of middlemen. This will attract people with specific risk tolerances and indirectly improve liquidity for all participants across all markets.
For suppliers: Users can enjoy choosing from a wide range of automation strategies while keeping their risk profiles completely customizable.
For vaults: The on-chain components (Agent & Hooks) will be highly reusable and allow vaults to use them as vault allocators. People can create more autonomous vaults with this kind of “agent-allocator” architecture to create more decentralized vaults with on-chain immutable constraints.

Metrics:

Complete development of all engineering objectives, with contract security audited and has 0 high severity findings.
At least one other entity running agents, with > $100K authorized
Total funds authorized under agents > $3M within 4 months after public launch

Timeline:

Beta Launch (2 Months):
- Complete smart contract design, development, and audit
- Complete UI/UX design of the new platform
- Develop agent bot framework
- Beta Launch (allow users to authorize or migrate to MonarchAgent V2)
Production Launch (+1.5 Months):
- Complete all frontend components
- Public Launch

Future Directions:

Short term – AI agents: Build and run an AI agent with LLM model, because AI is inevitable and it’s very cool. Planned for Q2 2025.
Long term – Fully achieve self-sustainability as a P2P protocol: user pays agents a fair amount to reallocate within their own risk appetite, with highly customizable constraints.

cleyfe · December 30, 2024, 9:53am

Project title: Yield-to-Impact Platform on Morpho

Organization Name: ChainCare

Organization website and/or social medias

https://chaincare.replit.app/ & happyapy.ai (other domains available soon but number of links in the post is limited)
GitHub: GitHub - cleyfe/chaincare: ChainCare is a DeFi platform that enables sustainable impact investing through yield-generating vaults on the Base network.

About Us + Prior Experience

I’m a solo builder in this project, with both crypto app development (Buckets & yields.digital)) and humanitarian experience, particularly in post-disaster reconstruction in Sri Lanka (2004 tsunami). This hands-on experience highlighted the need for transparent fund management in humanitarian projects.

ChainCare aims to innovate in the humanitarian space by having donors contribute with their interest instead of capital, redirecting DeFi yields to humanitarian causes while maintaining full transparency on capital usage. The project is still in its early stages, and I am committed to building in public and engaging other contributors to participate, using the grant as an additional incentive.

Leading Contributor(s):

Clement:

X - cleyfe.eth
Linkedin - Clement Felley

Requested Budget:

10,000 MORPHO

Frontend/webapp (8,000 MORPHO)
Operations/documentation (2,000 MORPHO)

Scope of Work

Objective: Build a user-friendly platform that leverages Morpho’s infrastructure to create sustainable funding for humanitarian projects through yield redirection.

Features:

Intuitive Web3 Onboarding:

Smart wallet creation with email/social login
Fiat onramp with QR for direct donations
Simple deposit interface

Vault Integration:

Integration with IPOR vault
Yield redirection to humanitarian multisig (can include MORPHO in the multisig if necessary)
Real-time APY and impact tracking

Project Governance:

Permissionless project proposal system
Forum integration for proposal discussion
Impact reporting dashboard

User System:

Wallet-based authentication
Profile management
Forum participation credentials

Timeline (3 months):

Month 1 - Core Infrastructure (4,000 MORPHO):

Web app setup and core UI
Wallet integration with simplified creation flow
Basic IPOR vault integration
- Deposit interface
- Balance display
- APY tracking

Month 2 - Humanitarian Projects Platform (4,000 MORPHO):

Projects dashboard implementation
Simple forum/discussion system
User authentication system
Onramp integration with QR codes
Initial testing with USDC

Month 3 - Polish & Launch (2,000 MORPHO):

UI/UX refinement
Performance optimization
Documentation completion
Bug fixes and testing
Public launch
Post-launch support

Benefit for Morpho Ecosystem:

Showcases Morpho as infrastructure for social impact
Attracts non-DeFi users through humanitarian angle
Increases TVL through charitable vault deposits
Positive PR through social impact

Metrics:

End of Month 1: Working deposit interface
End of Month 2: Complete project platform
End of Month 3: Public beta
10 active humanitarian projects proposition by end of month 3

Future Directions:

Liquid deposit token
Transparent onchain donations system
Onchain voting system for projects support
Integration with more humanitarian organizations
Advanced impact tracking
Mobile app development

ZachElara · December 30, 2024, 1:31pm

Project Title: Elara Morpho Vaults and Markets Frontend on Zircuit

Organization Name: Elara Labs

Organization Website and Social Media Links:

•APP: https://app.elara.finance
•X: x.com
•Discord: Elara
•Docs: https://learn.elara.finance/

About us:

ElaraLend is a lending protocol designed for Liquid Staking Tokens (LSTs) and Liquid Restaking Tokens (LRTs), driving efficient liquidity solutions for staked assets.

As the #1 lending protocol on Zircuit, ElaraLend extensively supports LSTs/LRTs as collateral and provides optimized liquidity strategies. Our goal is to collaborate with Morpho to build innovative Vaults and Markets, enhancing the efficiency and scalability of the ecosystem.

Requested Budget: 35k MORPHO

Scope of Work:

Build a Morpho Vaults/Markets Frontend Instance on Zircuit:
•Develop a user-friendly frontend to enable seamless interaction with Morpho Vaults and Markets on Zircuit.
•Ensure the frontend integrates with Zircuit infrastructure to provide a high-quality user experience.
Curator Role: Develop an Automated Allocation Strategy:
•Design and implement an automatic fund allocation strategy to optimize pool utilization and boost yields.
•The strategy will dynamically allocate funds based on key metrics:

Supply Cap: Prevent over-allocation to individual pools.
Utilization Rate: Prioritize under-utilized or over-utilized pools to balance liquidity.
Target Utilization: Ensure pools operate at optimal utilization rates.
Idle Supply: Maintain reserves for immediate withdrawals.
Supply APR: Allocate funds to high-yield pools to maximize returns.
•Outcome: Improve overall pool utilization and increase vault APR by 15%.

Expand Cross-Chain:
•Upon success on Zircuit, replicate the Morpho Vault strategy to other blockchains, enabling multi-chain adoption and liquidity optimization.

Benefit for the Morpho Ecosystem:

Increased TVL and User Base:
•Leverage Elara’s existing dominance on Zircuit to onboard new users and significantly increase TVL in Morpho Vaults. With strong backing from Zircuit, the project will work toward unlocking $2.1 billion in staked assets, amplifying Morpho’s influence in the network.
Improved Vault Utilization and Yield:
•Enhance overall pool efficiency and increase vault APR by 15%, benefiting both lenders and borrowers.
Dedicated Frontend Development:
•Provide a high-quality Morpho frontend on Zircuit, improving accessibility and user engagement.
Multi-Chain Expansion:
•Establish a scalable foundation for Morpho Vaults to expand across multiple ecosystems, driving long-term growth.

Success Metrics:

•Frontend Deployment: Launch a Morpho frontend on Zircuit within two months.
•Vault APR: Boost average vault APR by 15% through optimized allocation strategies.
•TVL Growth: Achieve $20M TVL in Morpho Vaults within three months.
•User Adoption: Onboard 1,500+ active users to Morpho Vaults.

Timeline:

•Month 1:
Develop the Morpho Vaults and Markets frontend on Zircuit. This phase will take approximately 2–3 weeks, focusing on building a user-friendly and robust interface for seamless interactions.

•Month 2:
Launch a campaign to boost TVL and borrowing activities in the vaults on Zircuit, driving user engagement and ecosystem adoption.

•Month 3:
Power the vaults with the automated allocation strategy, dynamically optimizing fund supply and withdrawal to improve utilization and yields.

•Month 4:
Optimize strategy effectiveness by fine-tuning allocation algorithms and measuring improvements in utilization and APR across the vaults.

Future direction:

If the strategy proves successful on Zircuit, we plan to expand the frontend and strategies to additional blockchains, enabling multi-chain adoption and unlocking liquidity of Morpho and Elara across diverse ecosystems.

yvesfracari · December 30, 2024, 1:32pm

Project Title: Morpho Stop Loss

Organization name: bleu builders

Organization website and/or social media links:

About us + prior experience: bleu is focused on making complex blockchain interactions more accessible. We partner with companies and DAOs to build better user experiences, with most of our work centered around blue-chip protocols like CoW Protocol, Balancer, and Optimism. In the recent collaboration with CoW Protocol, we developed multiple similar Safe App projects:

CoW Stop Loss: Stop loss orders management system powered by Chainlink oracles, providing automated protection against price drops.
CoW AMM Deployer: first-ever interface to create and configure your own CoW AMM.
MilkmApp: Milkman orders management for DAOs to sell tokens while letting the market determine the final execution price.

Leading Contributors:

Pedro (GitHub) - software engineer, 2y building web3 apps, including +5 CoW projects
Fábio (GitHub) - co-founder, 4y experience in web3 analytics and development

Requested budget: 35k MORPHO

To calculate this budget we considered up to 10k USD on the smart-contracts audit.

Scope of Work: The project entails the development of a sophisticated Safe App designed to protect users from DeFi liquidations through automated position management. By leveraging CoW Protocol’s advanced features, specifically programmatic orders and hooks, the application provides users with a robust solution for maintaining healthy positions in Morpho markets. This automation not only safeguards user positions but also takes advantage of CoW Protocol’s core benefits, including protection against MEV extraction, efficient batch processing, and optimal trading surplus distribution.

Automated Health Factor Management:

The application uses CoW programmatic order flow to monitor users’ positions across DeFi lending markets, automatically intervening when health factors approach critical levels. Users can customize their risk preferences by setting minimum health factor thresholds and selecting specific ERC20 tokens as reserves to be used for protection. This flexibility allows users to maintain their preferred risk management strategy while ensuring positions remain secure.

Token Reserve System:

The system implements a secure, non-custodial approach to managing reserve tokens. All user-selected reserve tokens remain safely stored in the user’s own Safe wallet until needed for position maintenance. This preservation of token custody enhances security and gives users complete control over their assets until the moment they’re needed.

Technical Implementation:

The application’s core functionality is built upon two key CoW Protocol features:
- Programmatic Orders enable sophisticated order execution through smart contracts. These contracts can analyze on-chain data to determine optimal order parameters, including token amounts and pricing.
- CoW Protocol hooks provide the framework for automated pre- and post-swap actions. After successful swaps, the hooks automatically allocate acquired tokens to either debt repayment or collateral addition, depending on the strategy selected by the user.

Wireframes:

Benefit for the Morpho Ecosystem: This protection application uniquely benefits the Morpho ecosystem by helping users avoid liquidations with its distinctive architecture. By integrating with CoW Protocol, users benefit from MEV protection and optimal pricing through batch auctions while maintaining complete custody of their positions and reserve tokens in their Safe wallet, different from other traditional solutions that require asset delegation or specialized vaults.

The application’s permissionless and decentralization aspects align with Morpho’s principles. Users can select any ERC20 token as their reserve, and the entire protection mechanism operates through smart contracts on-chain, eliminating reliance on centralized operators. This combination of self-custody, flexible token support, and trustless execution creates a more robust approach to liquidation protection while preserving Morpho’s foundations.

Metrics:

Successfully deployed and audited smart contracts with zero critical/high-severity findings
Total value of positions protected (TVL) reaching $500k within first 6 months post-launch

Timeline: Total timeline (12 weeks)

Smart Contract Development (2 weeks)

The core development focuses on creating a new Programmatic Order Type smart contract integrated with the Composable CoW framework. This integration is achieved by implementing the essential method:

function getTradeableOrder(
    address,
    address,
    bytes32,
    bytes,
    bytes
) returns (GPv2Order.Data memory order)

The development scope includes building supporting libraries and contracts for Morpho protocol interactions, oracle integrations, and utility functions. Despite the moderate complexity of these contracts, an audit will be conducted to ensure security and reliability before deployment.

Data Indexing Service (2 weeks)

Building upon our existing composable CoW API from the CoW Stop Loss project, we will extend the indexing service to track user protection strategies and rebalance orders. This service will monitor and index relevant events from the CoW protocol, providing the Safe App with necessary real-time data for position management.

UX/UI Design (1 week)

The existing wireframes will be transformed into comprehensive Figma designs, incorporating:
- Notification system for position updates and actions
- Seamless transaction flows with clear status indicators
- Order management interface including deletion workflows
- Comprehensive error handling and recovery paths
- CoW Hooks proxy creation interface
- Cohesive application branding and visual identity

Safe App Development (5 weeks)

The frontend implementation will create an intuitive interface for Safe Wallet users to manage their position protection strategies. Key technical aspects include:
- Integration of weiroll for efficient swap execution data handling
- Implementation of CoW hook proxy within the Safe context
- Real-time position monitoring and management interface
- Oracle search and discover feature.
- Responsive design ensures compatibility across devices
- Comprehensive testing across various network conditions

Review and launch (2 weeks)

To ensure the project’s success, we will implement a phased launch approach. Initially, we will conduct a beta testing phase with selected users from both Morpho and CoW communities. The feedbacks collected are going to help us identify potential improvements and optimize the user experience before the public launch.
If possible, the public launch will be coordinated with Morpho and CoW’s marketing teams to maximize reach and adoption. We will leverage both protocols’ established communities to showcase the application’s unique benefits.
Key metrics for success will be actively monitored post-launch, including user adoption rates, average health factor improvements, and user retention. This data will guide further improvements and feature development to better serve the DeFi community’s needs.

Future directions (optional):

Advanced Position Management: Implement maximum health index orders to automatically rebalance positions based on market condition ons for optimal capital efficiency.
EOA Wallet Support: Expand support to EOA wallets beyond Safe Wallets, making the tool accessible to more users while maintaining security.
Enhanced Notifications: Keep users informed of position status, balances, and market conditions through email, push notifications, and Discord alerts.
Strategy Customization: Enable users to edit protection parameters on existing positions to adapt to changing market conditions.
Transaction Optimization: Batch multiple protection actions into single transactions to reduce gas costs and improve user experience.

Disiaque · December 30, 2024, 1:55pm

Project Title

Morpho Strategy into Mangrove Vault

Organization name

Mangrove Association (ADDMA)

Organization website and/or social media links

https://x.com/MangroveDAO

About us + prior experience

Mangrove is an order book DEX that allows liquidity providers to create offers through arbitrary smart contracts (hooks). This enables advanced features such as offering liquidity held on other protocols, liquidity amplification, and liquidity provision via custom strategies.

With our new V2 dApp, which introduces vault features and a new UI/UX, we plan to integrate various lending protocols into our strategies. This will provide users with access to more liquidity sources and yield opportunities.

Leading Contributor(s)

Vincent Danos

Role: Co-founder of Mangrove
Description: His contributions mostly centre on researching the design space of strategies for liquidity provision on Mangrove markets and how to make them best synergise with other on-chain protocols.

Joseph Bosselut

Role: CEO of Mangrove
Description: Joseph is a core contributor to the Mangrove protocol. He is managing the strategy and product development of the protocol thanks to his technical expertise as an engineer and his background in banking and as a multi-entrepreneur.

Disiaque

Role: Head of Operations
Description: As an active member of both Ethereum and DeFi communities, Disiaque brings his expertise to Mangrove by managing the protocol’s administrative, financial, and legal operations. His experience spans across the DAO landscape, where he contributes as a governance actor.

Maxence Raballand:

Role: CTO of Mangrove
Description: Maxence is a core contributor to the Mangrove protocol, leading the development of the Mangrove Strategy Library’s second iteration. His contributions span across multiple technical domains, including the SDK development, subgraph implementation, trading bot architecture, and smart contract integrations with protocol partners.

Requested budget

15k MORPHO

Scope of Work

The purpose of this grant is to audit our integration of Morpho as a liquidity source for our main strategy: Kandel.

Kandel is an Automated Market Making (AMM) strategy that leverages on-chain order flow to repost offers instantly with zero latency. It functions as a blockchain-native market-making bot, capitalizing on the interactions between buyers and sellers that drive price movements, rather than relying on absolute price levels.

In Mangrove V2, vault managers optimize capital efficiency by deploying the Kandel strategy while depositing unused liquidity into lending platforms. This approach has been successfully implemented on Arbitrum through AAVE integration.

We now aim to deploy a similar strategy with Morpho as part of our upcoming launch on Base. The entirety of the grant will be dedicated to funding the audit of the Kandel-Morpho strategy, to be performed in collaboration with our security partner, Nethermind.

Benefit for the Morpho Ecosystem

Through this Mangrove integration, Morpho users would gain access to enhanced yield opportunities, a feature that has demonstrated robustness during our beta stress testing on Blast (500M volume).

From an ecosystem perspective, this integration will further solidify Morpho’s position as a leading lending protocol within the Base ecosystem.

We are launching the second version of Mangrove on Base. The integration with Morpho would make the DEX not only significantly more capital-efficient but also pave the way for the next strategies we plan to build on Morpho Base.

Metrics

Deposit of the first $5M in TVL through the various Kandle-Morpho vaults on Base.
Increase of active users on Morpho

Timeline

Two months of development + audit.

Future directions

This Morpho integration serves as our first iteration.

We are planning a second phase that will introduce leveraging capabilities for vaults to maximize yield potential. While inspired by Loopy’s approach, this advanced strategy is specifically designed for risk-seeking investors, as it employs leverage mechanisms that inherently carry higher risk exposure. This initial integration with Morpho will serve as the stepping stone for developing an automated looping strategy for the DEX’s LPs. This strategy will not only boost the yield for LPs but will also be accessible to everyone to use.

Link to loopy research paper: Morpho Loopy Research Paper by Mangrove.pdf - Google Drive

0xtoki · December 31, 2024, 8:25am

Project Title: Morpho Venue Integration

Organization name: Agra

Organization website and/or social media links:

Twitter
Website Launch - January

About us + prior experience:
Agra is a user-centric, on-chain trading platform designed to streamline lend/borrow operations, swaps, derivatives, and cross-venue margining. It aggregates and unifies protocols and application-specific chains into a single, cohesive application for seamless user experience. Agra Settlement is the infrastructure behind that functions as a integration layer for intent fulfilment, enabling protocols and market makers to collaborate and provide efficient trade execution.

We intend to integrate Morpho as a fulfilment venue for both margin trading and lend/borrow. Trades will be routed to Morpho pools to offer users the best possible rates. Agra enables users to use positions in Morpho as collateral and trade with them in other integrated platforms.

Our team originates from Bonsai DAO, a collective of builders focused on building innovative consumer applications. We are best known for Umami Finance, an innovative yield platform offering high single sided yield. We built an advanced LP strategy on perpetual exchanges.

Leading Contributor(s):
0xtoki
Twitter : 0xtoki_
Github: 0xtoki

0xdapper
Twitter: 0xdapper_
Github: 0xdapper

Requested Budget:

10k MORPHO

This grant will partly cover the expenses related to the integration and audit. Specifically the Morpho handler and the open source solver.

Scope of Work:

Goal: Integrate Morpho as a fulfilment venue for borrow and margin trading within Agra.

Design and implement a Morpho handler following our modular handler interface. This includes defining functions for borrowing, repaying, and tracking user balances within Morpho pools.
Testing compatibility with Agra’s architecture.
Implement functionality to set stop-loss and limit orders on borrow and leverage positions.
Index all borrow rates across Morpho pools and integrate them into the solver to calculate the most optimal distribution of positions.
Implement Morpho’s interest rate model in Rust.
Develop off-chain infrastructure to index and display Morpho positions in Agra accounts, enabling tracking of user metrics and integration with cross-venue trading features.

Benefit for the Morpho Ecosystem:

Increased Borrow Volume and Liquidity Utilisation: Integrating Morpho as a fulfilment venue for borrow and margin trading will direct order flow into Morpho pools, driving higher utilisation rates and enhancing yields for liquidity providers.

Seamless User Experience and Broader Adoption: Agra’s user-centric interface, featuring gas sponsorship and signature-based transactions, lowers barriers to entry for Morpho’s products. This streamlined approach will expose Morpho to a wider audience, including those less familiar with DeFi.

Enhanced Capital Efficiency and Cross Collateralisation: The integration will unlock the ability for users to leverage Morpho positions as collateral, enabling capital-efficient trading across multiple protocols. This allows users to maximise the utility of their assets and improves the value proposition of the Morpho ecosystem.

Strengthened Ecosystem Synergies: The integration creates new opportunities for synergies between Morpho and other DeFi protocols. Morpho positions will be interoperable with other Agra-integrated venues, creating a cohesive and efficient ecosystem.

Metrics:

Launch the public beta with a Morpho integration and complete the security audit.
Migrate $1M of Borrow positions in Morpho to Agra Accounts.

Timeline:

2 Months for development and launch of beta, 1 month for audit. The project timeline will follow this roadmap:

Solidity Integration (4 weeks):
- Design and Implement the handler according to the Agra handler interface.
- Testing the handler.
- Signature scheme for borrow and leverage positions.
- Stop loss and limit orders.
Solver and off-chain infrastructure (6 weeks):
- Index borrow rates for all pools.
- Implement Morpho interest rate model in rust for the solver to find optimal positions.
- Index Morpho positions in Agra accounts for tracking metrics.

Future directions:

Upon integration of Morpho as a margin trading venue, these positions can be used as collateral for trades in Agra accounts. Unlocking cross collateralisation between morpho and other protocols within Agra accounts.

Offering yield products from an Agra account will provide opportunity for a further Morpho vault integration.

CHAGO · December 31, 2024, 12:38pm

Project Title: Morpho x Stake DAO : Factory for Curve LP Integration through OnlyBoost V2

Organization Name: Stake DAO

Organization Website / Social Media:

Website: stakedao.org
Twitter: StakeDAOHQ
GitHub: Stake DAO · GitHub

About:

Stake DAO is a DeFi protocol focused on maximizing yield for liquidity providers on various DeFi protocols, and unlocking the power of governance tokens of those protocols. By offering a liquid staking wrapper of those governance tokens, Stake DAO accumulates large amounts of boosting power which allows it to offer boosted access to providing liquidity on those protocols. This architecture is the foundation powering OnlyBoost, a yield optimization strategy for underlying protocols like Curve.

OnlyBoost mechanism (example of Curve):

Users deposit Curve LP tokens into OnlyBoost vaults
The protocol automatically optimizes positions between Curve (boosted by Stake DAO’s veCRV balance and veBoost delegated to Stake DAO by other veCRV holders) and Convex based on highest veCRV boost
Users receive optimized CRV rewards + extra tokens (additional gauge rewards)
The system handles gauge deposits, rewards claiming and distributions

Leading Contributors’ X handles:

Hubert: HubertX13
Warren (smart contract developer): warrenception
Chago: chago0x

Requested Budget: 25,000 MORPHO

Use of Funds:

Smart contracts and UI development
Security audit
Testing & Deployment

Scope of Work:

Build a Morpho-specific wrapper for OnlyBoost V2, enabling users to use their Curve LP tokens as collateral on Morpho markets while still receiving their CRV rewards and other extra rewards, and maintaining their yield optimization strategy. The integration will be deployed on Ethereum mainnet initially and will be freely accessible to all users with no additional fees. It will be accessible on other chains after Curve’s boost goes live on other chains.

Key components:

Morpho-specific wrapper implementation:

Integration with Morpho lending/borrowing functions
LP token collateral management

Integration with OnlyBoost V2 architecture:

Connection with existing reward systems
Safety mechanisms
Unified user interface

Benefit for the Morpho Ecosystem:

The problem we are trying to solve is an easy allocation of claimable rewards for users depositing yield generating collateral on Morpho. Currently, curators need to build adapters and wrappers to do this. With the factory we intend to develop, anyone would be able to deploy collateral that generates claimable rewards

By integrating with Curve’s LP ecosystem ($2.5B TVL, up to $20bn TVL during the last cycle), this first factory implementation will unlock significant new collateral opportunities for Morpho. Users can maintain their yield farming positions while accessing Morpho’s lending markets, creating a powerful synergy that drives protocol growth. This initial integration paves the way for expanding to other major DeFi protocols, positioning Morpho to capture an increasing share of the LP tokens market as collateral.

It should also enable looping between lending and liquidity providing, hence allowing lending yields to align with the generally higher liquidity provision yields, and increasing Morpho’s lending attractiveness.

This will be a huge step towards users receiving yield on their collateral on Morpho, yield that could finance their borrowing rate, or even more.

Metrics:

Factory deployment and integration metrics:
- Completion of all security checks
- Successful wrapper deployment for Curve LP tokens
Initial Adoption metrics:
- 5m$ successful deposits using the Factory

Payment structure (following template requirements):

20% upfront (5,000 MORPHO)
20% upon Factory deployment and integration metrics (5,000 MORPHO)
60% upon Initial Adoption metrics (15,000 MORPHO)

Timeline:

1 month development once OnlyBoost V2 is deployed:

Morpho wrapper implementation
Integration with OnlyBoost V2
Testing phase
Public launch

Future Directions:

Extension of the Morpho-specific wrapper to all Stake DAO locker strategies (Balancer, PancakeSwap, Spectra, Pendle, F(x), Frax, etc), including governance token lockers

yevhenx · December 31, 2024, 2:10pm

Project Title: Unicord

Organization name: Lumis

Organization website and/or social media links:

Due to the link limit for new users, here is the document with all the additional links - Link

About us + prior experience:

Our team has extensive expertise with spot and derivatives DEXes and lending protocols. Previously we built together an automated liquidity manager for Uniswap V3 - Hedgehog vault that provides liquidity for the ETH-USDC pool and hedges its impermanent loss with power perpetuals (Squeeth). Also, together, we won the following hackathons:

Hack DeFi with Wintermute with Conditional - customizable hooks DEX (proto Uniswap V4)
Uniswap Atrium hookathon 1 - hook-based options on top of Uniswap V4 and Morpho (where we gradually increase our power perps positions by borrowing funds on Morpho)
Uniswap Atrium hookathon 2 with Unicord - rehypothecation adapter that deposits all Uniswap liquidity into Morpho and withdraws it on-demand for trading.

This grant request aims to complete Unicord to the production level, integrate with solver’s network and launch it on the Ethereum mainnet and Base L2.

Leading Contributor(s):

Name: Yevhen Liubchenko
Role: Mechanism Design
Previously: Project Owner for Node-as-a-Service Provider, Quant at JMT
B.A. in Mechanical Engineering, M.A. in Economics
Links - Check doc

Name: Ivan Volovyk
Role: Solidity developer
Previously: CEX trading engine development at MadFish, Supply chains data engineering at Bosch, Physical national olympiad winner
B.A. in Computer Science, M.A. in Economics
Links - Check doc

Requested budget: 15k MORPHO

Scope of Work:

Protocol that enables permissionless Uniswap V4 hook deployment that maximizes yield by deploying 100% liquidity to Morpho lending protocol and implementing on-demand withdrawals for trades. It optimizes capital efficiency while ensuring liquidity availability.

The protocol will execute the following flow for the ETH-USDC swap tx:

The contract supplies both ETH and USDC as collateral on Morpho
When we receive ETH from the user for the ETH → USDC swap operation
In pre-hook: calculate the amount of USDC that we owe to the user and withdraw this amount from the lending protocol
Execute the swap
In post-hook: increase our ETH collateral

This way, by executing on-demand lending protocol deposits/withdrawals, we significantly boost overall LP returns by collecting both trading fees and interest rate payments.

The whole swap flow is achieved by applying the NoOp approach that enables us to execute custom trading operations during the swap transactions without enforcing the original Uniswap V3 CLAMM restrictions.

This tool will be especially useful for stablecoin and pegged asset pools by offering significantly improved LP returns compared to the existing solutions, like Curve and Uniswap V3.

Though this product requires integrations within the solver’s network to attract trading volume, recently PropellerHeads introduced Tycho: The open-source liquidity indexer. By integrating with their product we will be able to attract the sustainable trading flow required for bootstrapping our liquidity pools powered by Mopho additional yield.

Our business model here is a 5% curation fee.

Benefit for the Morpho Ecosystem:

With expected APY for stablecoin pools of 15-20% compared to 1-2% APY on Uniswap V3, our product can bring substantial TVL to Morpho that will migrate from Curve and Uniswap V3 stablecoin and pegged asset pools. But, also providing a new yield source for LPs looking for increasing their yields while operating in a fully non-custodial way.

Metrics:

Achieve $100M TVL

Timeline:

4 weeks of development and testing
2 weeks for audits

We already received a subsidy from Uniswap Security Fund that will cover audit costs with an expected timeline of audits starting on Feb 3. By this time, we plan to fully finish development and testing. Expected mainnet launch - March 3.

Future directions (optional):

We also have plans for leveraged LPing functionality that combines leveraged long and short positions to offer up to 10x more liquidity and hence trading fees for LPs.

Beta_Sigma_Tech · December 31, 2024, 3:31pm

Project Title: Morpho Borrowers’ Interactive Dashboard
Organization website and/or social media links:
Organization name: Beta Sigma

Website: https://betasigma.tech/

1. Introduction

At Beta Sigma we are dedicated to developing technology for risk management in decentralized finance (DeFi). By leveraging machine learning, statistical modeling, and risk simulations, we are aimed to empower both governance communities and individual users to make more informed, strategic decisions about financial risk.

Borrowers interacting with Morpho often encounter a complex array of choices, with multiple options and limited visibility into their individual risk exposures. Although Morpho offers a robust platform for lending and borrowing, borrowers may lack the necessary tools to accurately evaluate their positions relative to others, anticipate potential liquidation risks, and identify the most suitable lending options. This can result in inefficient capital utilization and heightened risk for users. Furthermore, while Block Analitica’s dashboards provide timely insights into protocol-wide metrics and individualized position data, the current solution may lack the personal and interactive features needed to fully meet borrowers’ needs.

To address this gap, Beta Sigma proposes the development of a risk management dashboard tailored specifically for Morpho borrowers. This interactive dashboard will provide borrowers with personalized risk overviews, tools for comparing loan options, and enhanced public risk information. It is designed to equip Morpho users with the necessary insights to manage their borrowing positions more strategically, leading to increased user confidence, greater participation with the protocol and more efficient markets.
The goal of this proposal is to develop and deploy this dashboard for the Morpho ecosystem.

2. About Us + Prior Experience

Beta Sigma is a data science and technology startup driven by a passion for research, innovation, and real-world impact in the decentralized finance (DeFi) space. Our team brings together expertise in economics, data science, and blockchain technology, enabling us to tackle complex challenges with innovative solutions. We believe that transparency, informed decision-making, and robust risk management are crucial for the long-term sustainability and growth of DeFi.

Relevant Experience

Our team possesses significant experience in developing and implementing sophisticated financial risk models using machine learning and statistical analysis, with a strong focus on calibrating simulations with historical data to achieve reliable predictive accuracy. We are also currently developing a See: defi.betasigma.tech, focused on lending protocols, which visualizes lending risks through calibrated simulations.

Team

Ricardo Pasquini (Founder, PhD): Economics and Finance professor at Universidad Austral and IAE Business School. Brings experience implementing ML/ data solutions in Fintech. A seasoned researcher with expertise in econometrics, financial modeling, and risk management.
Javier Garcia Sanchez (Advisor, PhD): Finance professor at IAE Business School. Expert in simulation methods. Also researching and teaching DeFi.
Joaquin Iannuzzi (Full-Stack Developer) ): A skilled full-stack developer with experience in building both front-end and back-end applications for DeFi protocols.
Francisco Sesto (Data Scientist & Economist): A skilled economist developing and implementing ML models, along with a strong mathematical background.
Benjamin del Pino (Data Scientist & Economist): Business economics graduate from U. Austral.
Juan Wittstatt (Data Scientist & Economist): Business economics graduate from U. Austral.

3. Scope of Work

Beta Sigma proposes the development of a comprehensive risk management dashboard tailored specifically for the Morpho protocol borrowers. This interactive dashboard will empower Morpho borrowers with personalized risk insights, tools for informed decision-making, and enhanced public risk data.
Product Overview:
The dashboard will serve as a key resource for Morpho borrowers to actively learn about their risk exposure. It will integrate data from Morpho’s smart contracts and historical price data to provide a view of individual positions, comparative risk analysis, and predictive insights.
Key Features:
Personalized Risk Management Tools:

Individual Position Overview. Borrowers will gain a clear understanding of their liquidation risk through an interactive risk map. This map visualizes each borrower’s position relative to their debt-to-liquidation-limit ratio, allowing them to easily see how close they are to potential liquidation. Additionally, the map enables users to compare their risk position to the distribution of all other borrowers in the protocol by simply entering their address ID, and filter positions to compare on the basis of the currency collateral.
Predictive Volatility Integration: The dashboard will also incorporate predicted price volatility data into its risk assessments, allowing borrowers to understand how price fluctuations could impact their positions, and the associated probabilities of such outcomes. These probabilities will be dynamically estimated using machine learning models and historical currency prices. The results will be integrated into the interactive charts and will allow borrowers to experiment with price movements.
Loan Option Comparison: This feature will allow borrowers to compare the risk and returns of different lending options (i.e., markets) available on Morpho. The tool will calculate and display the expected yield per unit of collateral, and the estimated risks of liquidation for each option, enabling users to make informed loan choices based on their risk tolerance and yield objectives.

Technical Approach:
The dashboard will be built using a modular and scalable architecture, leveraging a combination of web technologies, machine learning frameworks, and APIs. The data will be collected through direct interactions with Morpho smart contracts, supplemented by historical price data from various providers. We use Python to develop stochastic predictive models using machine learning and simulation techniques.

4. Requested budget

Beta Sigma is requesting a total of 25,000 MORPHO tokens to successfully develop and deploy the risk management dashboard for the Morpho ecosystem. This budget has been carefully allocated to cover essential expenses for the project, including development, research, infrastructure, and team compensation. We believe this budget will be enough to achieve all our proposed milestones.

This grant is solely for the development and deployment of the dashboard and does not imply a service provider agreement between Morpho and Beta Sigma. This initial step is intended to showcase the Borrowers’ Interactive Dashboard functionalities. Once the functionalities described are implemented, the dashboard will be made available online for at least an additional month. Following this period, a proposal for a service provision agreement will be submitted to the Morpho community for consideration

5. Benefit for the Morpho Ecosystem

The risk management dashboard proposed by Beta Sigma is designed to provide a range of benefits to the Morpho ecosystem, ultimately fostering a more robust, transparent, and user-friendly environment.

User Empowerment:

Simplified Risk Understanding: The dashboard will make it easier for all users to grasp the complexities of borrowing on Morpho. By presenting risk information clearly and visually, it will empower users to make more confident and informed decisions.Personalized Risk Management: By providing personalized risk overviews and tools, the dashboard will empower each borrower to manage their risk according to their own risk tolerance and objective.

Improved Decision-Making:

Informed Loan Choices: The interactive tools will enable users to compare different lending options, highlighting potential risks and rewards. This will help them choose strategies that align with their goals, optimize their capital utilization, and increase overall returns on the platform.

Reduced Liquidation Risks: By understanding their debt-to-liquidation ratios and incorporating historical volatility, borrowers can proactively adjust their positions to minimize the likelihood of liquidations, thus reducing costs and increasing the overall stability of the protocol. In summary, the risk management dashboard will not only improve the borrowing experience for individual users but will also contribute to a more resilient, transparent, and thriving Morpho ecosystem.

5. Quantifiable Goals

Increased User Adoption: The primary objective is to drive significant adoption of the risk management dashboard among Morpho borrowers. Success will be evaluated based on the number of unique users actively engaging with the dashboard. To monitor progress, we will track daily, weekly, and monthly active users.
- KPI: As a benchmark, the Block Analitica’s Morpho dashboard received 420 visits in the past month, according to SimilarWeb data. Our goal is to surpass this figure.

6. Timeline

Month 1: Dashboard Design, Statistical-Financial Design and Data Collection

Initial Dashboard Design	Protocol study and Conceptual Design of the Borrowers’ Dashboard user interface
Data Collection Layer and API Integrations	Implement the data collection layer, including blockchain data integration from Morpho smart contracts and any necessary external API integrations. This includes a detailed study of how the blockchain data must be handled and integrated into the product.
Predictive and Stochastic Models	Integrate Beta Sigma’s stochastic models for simulations, using historical price data and data coming from the Morpho protocol.

Month 2: Simulation Engine and User Interface Development

User UI	Develop the first version of the dashboard’s user interface, focusing on a simple UX that can be used to show and experiment with the basic functionalities of the product
Interactive Simulation Tools	Integrate interactive simulation management tools for borrowers to simulate the effect of different parameters and price fluctuations on their positions.

Months 3 and 4: Risk Management Dashboard and User Validation

Risk Visualization	Develop the full version of the dashboard with real-time risk visualization tools, incorporating the necessary graphs and tables to present the data in a user-friendly way.
User Validation and Feedback	Conduct user validation sessions, gather feedback, and implement adjustments to the dashboard.
Dissemination, workshops and Webinars	Prepare workshops and webinars explaining the product and its use, addressing the specific risks within the Morpho protocol that it aims to mitigate. Publish blog posts and social media content on the use case of the product and the importance of risk management in DeFi.

Future Work

Once the project is completed, Beta Sigma could keep improving Morphos’ user experience with an additional support of the Morpho community:

Integrate BASE markets into the Borrower’s Interactive Dashboard: We will integrate BASE markets into the dashboard, which will initially be focused on Ethereum.

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