Ethena <> Morpho Blue - Incentives for the USDe and sUSDe markets

Summary

Ethena intends to distribute 7 shards per USDe/USDT per day and 5 shards per sUSDe/USDT per day for the upcoming Ethena epoch once vault goes live. Proposal to also cap the shards campaign at $50m.

We propose that the Morpho DAO handle this distribution and request that MORPHO tokens be included as additional incentives.

Ethena x Morpho Blue

Ethena is a synthetic dollar protocol built on Ethereum that provides a crypto-native solution for money not reliant on traditional banking system infrastructure, alongside a globally accessible dollar denominated savings instrument - the ‘Internet Bond’.

Ethena’s synthetic dollar, USDe, provides the first scalable and stable crypto-native solution for money achieved by delta-hedging staked Ethereum collateral. USDe is fully backed transparently onchain and free to compose throughout DeFi.

sUSDe is the staked version of USDe which redistributes yield from ETH staking and perp funding. It increases in value similar to wstETH.

By becoming a collateral asset, Morpho users can loop the attractive yield profile vs stablecoins. This increases lending APYs on Morpho, making the lending protocol more attractive for deposits while generating fees for the treasury.

Looping USDe will also generate plenty of looping interest to leverage farm Ethena shards.

Proposal Details

We plan to distribute 7 shards per USDe/USDT per day and 5 shards per sUSDe/USDT per day for the upcoming Ethena epoch. We propose Morpho incentivise these markets on the lending side as well.

Proposal to also cap the shards campaign at $50m.

We propose that the Morpho DAO handle this distribution by integrating it into the Standardized method for distributing incentives on Morpho Blue markets.

Should the proposal be accepted, we will send the aforementioned amount to morpho.eth.

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@Seraphim Thanks for this proposal.
Great to see USDe coming on Morpho and your willingness to develop it!

We believe USDe and sUSDe have great potential as collateral. We propose to allocate a total of 90k MORPHO as incentives over the three month period to help grow these markets. The incentives would be split 7/12 and 5/12 between USDe/USDT and sUSDe/USDT, in line with the shards distribution.

The MORPHO distributions would follow the Standard method for distributing incentives on Morpho Blue markets .

A vote will be initiated shortly. Should the vote pass, its execution will be contingent upon the shards distribution and the inclusion of the two markets in a MetaMoprho vault.

NB: distribution of incentives by the MORPHO DAO does not signify endorsement of market risks.

2 Likes