It is high time to enable MORPHO transferability ! The main goals is to
distribute the supply to more holders.
LFG !
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There are several potential strategies to build DEX liquidity for the Morpho token. It may be worth issuing an RFP for service providers to bid on liquidity-building, with clear success objectives.
The grants program should be community-led, but will require participation from the Morpho Association and Risk Curators to ensure success. I’d suggest starting with a straightforward process where applicants submit proposals to a grants committee, comprised of community-nominated members such as contributors, the Morpho Association, and Risk Curators. The Uniswap grant program could serve as a useful reference.
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Both of these points make a lot of sense to me!
I agree that a community-led or committee-managed grant program could be a great idea, and Uniswap is a solid benchmark.
Do you suggest having an external entity responsible for the program operations and grant distribution?
Congrats!! Amazing news.
A few thoughts on transferability:
With a large portion of supply becoming mobile at one time, significant volatility is to be expected early on. It’s important for users to have an adequate liquidity to transact and support price discovery.
I believe the DAO should strongly consider MORPHO incentives for liquidity providers on Uniswap v3, using a system like Merkl. The Morpho Association can engage with market makers and centralized exchanges to support integrations and liquidity (I’m not an expert on this), but:
- Robust onchain liquidity is useful so that users do not need to transfer funds to a CEX if they do not wish to
- An open incentives program for liquidity is more in the spirit of decentralization than agreements with a small number of market making firms
My suggestion therefore is that the Morpho Association should communicate with market makers about the terms for providing MORPHO liquidity, and compare this with the result of incentives campaigns using Merkl (I’m sure the team there can provide historical data upon request showing efficacy of $ spent on incentives in producing liquidity depth). Based on the results of these inquiries, the DAO can decide on the amount of resources to allocate to each type of liquidity.
As a user, primarily of the Morpho Earn product, I support the move to make the MORPHO token transferrable, for many of the same reasons listed above.
To offer something unique to the conversation, I’ll speak from my own long-term holder perspective, where there are pros and cons to both enabling transferability now and later.
Enabling now benefits long term believers in the protocol by allowing them to purchase a stake in the Morpho network at early valuations. Additionally, I speculate that at some point in the future, yield farming strategies in DeFi will be bundled into ETPs, which will bring unbridled liquidity into the space. Morpho’s protocol design is well suited to this future, but only if the MORPHO token can be sold by ETPs for additional yield, as holding speculative tokens inside a yield farming strategy makes very little sense.
On the other hand, enabling transferability later benefits long term users of the protocol by allowing them to accumulate a greater share of the supply purely through using the protocol for a longer period of time. Additionally, there is an opportunity to create immense hype around the protocol and farming tokens if transferability were left disabled until the DeFi space achieves much higher valuations.
A potential downside of enabling later, however, is that Morpho may miss out on opportunities like the ETP scenario I described above, should transferability still be disabled when institutions begin developing those products.
Overall, it seems to me that, from both a holder and protocol perspective, enabling sooner is the safer and potentially more rewarding choice for everyone.
P.S. Just make sure that MORPHO rewards from the Uniform Rewards Program are claimable in the UI well before transferability is enabled!
Transferability should happen as soon as there is governance ability plus some incentive to lock morpho in governance from the start. Early holders of morpho need a clear well-communicated reason not to dump. Staking incentives or governance incentives?