MIP-108: Morpho Olympics v1.2

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MIP-108: Morpho Olympics v1.2

Proposal

This MIP proposes a set of refinements to the Morpho Olympics reward mechanism for Vault curators. It builds on the existing structure laid out in MIP-60 and updated in MIP-89, focusing on improving the accuracy and incentive alignment of curator rewards by modifying the evaluation window and introducing utilization-based filters.

Motivation

Since the launch of Morpho Olympics, the program has played a critical role in aligning the interests of curators and the broader Morpho ecosystem. The current rewards model faces challenges during the evaluation of performance and might introduce some edge cases that result in misaligned incentives—particularly due to reliance on spot data at the beginning of each quarter and the absence of a filter for inactive or illiquid vaults.

This proposal aims to make reward calculations more representative of real-world curator performance over time, and to emphasize productive usage of capital in the protocol. The Morpho Association proposes that the DAO considers the following amendments to the Olympics program:

1. Extended Evaluation Window

  • Current: Rewards are based on a 2-month average performance out of the 3-month quarter.

  • Proposed: Extend the evaluation to the full 3 months of each quarter.

  • Rationale: This ensures that curators are rewarded for consistent performance throughout the entire period, not just a portion of it.

2. Revised Minimum Threshold Criteria

  • Current: Vaults must meet a 1% threshold on the first day of the quarter to qualify.

  • Proposed: Change this to require vaults to have at least a 1% average share over the full 3-month period.

  • Rationale: It reflects sustained impact rather than point-in-time. It will reduce the impact of price variations of loan assets over the quarter.

3. Minimum Utilization Requirement

  • New Criterion: A vault must maintain a minimum average utilization of 60% over the evaluation period to be eligible for rewards.

  • Rationale: This ensures that capital is not only deposited but also actively borrowed, aligning incentives with borrower demand.

Next Steps

If the proposal is passed, the calculation above will be applied to all future Olympics distributions.