MIP 109 -- Optimistic Rewards v1.1

Summary

Amend the optimistic rewards framework to further streamline rewards operations.

Background

The Morpho Association has identified certain inefficiencies in the optimistic rewards adjustment framework, particularly:

  • it does not allow for the swift removal of rewards from assets that have low demand
  • it is insufficiently flexible for new chains, where a highly responsive approach is optimal
  • it is unclear how reward rates for newly onboarded assets should be handled, which lack a reference rate

This is a proposal to improve the model and provide additional clarity to the guidelines from the Morpho DAO to the Morpho Association in setting reward rates.

Detail

Redefine the optimistic rewards framework as follows:

  • as before, all rewards changes will require 24 hours notice in the forum
  • the Morpho Association can increase the global rewards rate per chain by at most +30% per week
    • there is no restriction on the increase on per-asset rewards rates, as long as this does not increase the global rate per chain by more than 30%
  • there is no restriction on reductions in the reward rate, either globally or per-asset. This will allow the swift removal of rewards from markets on new chains that have low demand, increasing growth efficiency for new deployments.
  • authorize the Morpho Association to add new rewarded assets at not more than the highest reward rate among existing assets

Note that this removes the requirement that “reward rate cannot increase higher than 50% of the current level for any asset without a vote”, which has unclear application as MORPHO rewards are newly expanded to more chains in the future.

4 Likes

The vote has ended successfully.

As first suggestion under this new framework, the Morpho Association proposes to activate MORPHO rewards for the EURC loan asset on the lending side on Base. The proposed target emission rate is the same as for the ETH asset on this network.