First of all, congrats to the team for the outstanding achievements so far. The concept of Morpho Blue and MetaMorpho was a real breakthrough in the lending space and we now see several lending protocols getting inspiration from this model.
Let me express a few opinions about the present situations and what directions should be taken next.
General vision. Although this expression is often overused and misused by other lending protocols, my general vision for Morpho is the Uniswap of lending. This implies making access to vault curation more open. There are currently a few curators who share the TVL, which means not enough competition to attract TVL, or incentives to innovate and possibly too high fee compensation relative to the work of curating markets. Are fee rates of 5, 8 or 10% legitimate regarding the work of curation? Let the market decide by promoting more competition between curators.
As in Uniswap, build a simple interface allowing users to create vaults and decentralize the EARN interface. Lenders should select vaults a similar way liquidity providers choose a pool to put their liquidity in or investors trade tokens. This implies dropping or at least lowering the minimum TVL requirement to access the UI.
All defi protocols create a market in Uniswap or Curve to make liquid their tokens. Likewise, all defi protocols should find convenient to create by defaut a market for their tokens in Morpho. This means a lot of BD and an overhaul of the current UI, giving more visibility to individual markets. This also implies more initiatives to assess the riskiness of vaults and individual markets.
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Fee switch. Postponing the application of a fee rate is generally a sound policy to bootstrap the markets. But, in the case of Morpho, a fee is already applied by curators. If Morpho would be to switch the fee in the present situation I would recommend negotiating with curators so that the total fee rate doesn’t increase.
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Incentives. Continue to incentivize markets but improve the current system. Distributing a constant fee rate to all markets doesn’t maximize TVL as it fails to take into account differences in native APRs, TVLs and supply elasticities (see [Incentives system for isolated lending markets - HackMD](Incentives system) for a framework). This also applies to the fee rate chosen by Morpho in the future, which should take into accounts specificities of each market.
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Community. To decentralize the protocol, it is crucial to engage a broader community. We don’t see enough discussions about the roadmap in the Discord and the forum.
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Transferability. Before making the token exchangeable, retail investors and outsiders should be given more information to correctly value the token, including:
– the roadmap. Is a V3 in the work and if so, what it is?
– vesting. Are tokens held by the team and investors still vested and for how much? What’s the remaining schedule for the unlocks if there is one?