Summary
To support lending supply growth as the Coinbase borrow integration scales, authorize 25% of the standard MORPHO reward rate for Spark USDC deposits in the markets integrated by Coinbase on total deposits between $100M and $500M.
Details
Per MIP65, algorithmic market operations are generally excluded from MORPHO rewards, in order to ensure that the rewards budget is incentivizing direct usage of the Morpho protocol.
MIP 90 established an exception to this whereby Spark could receive 50% of the standard MORPHO reward rate for USDC lent against cbBTC in the market used by Coinbase, as well as other markets integrated for Coinbase borrows in the future, up to a total supply of $100M.
Since then, Coinbase borrows on Morpho have scaled up to over $200M in active loans, while Spark has steadily scaled up USDC supply into the cbBTC/USDC market, helping to stabilize rates for Coinbase borrowers. This proposal calls for authorizing 25% of the standard MORPHO reward rate on Spark deposits between $100M and $500M, to ensure stable rates and liquidity growth for borrowers on Coinbase as demand continues to grow.
We also propose that clear time durations are specified for the rewards for Spark:
Both the previously allocated rewards (50% of the baseline MORPHO reward rate up to $100M deposits) and the new rewards (25% of the baseline MORPHO reward rate on deposits between $100M and $500M), the term shall conclude 6 months from the date this proposal is approved by the DAO.
Next Steps
If authorized, the 25% reward rate would apply from time the proposal is approved by the DAO.