MIP 109 -- Optimistic Rewards v1.1

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.

10 Likes
MIP 116 - Unichain Rewards Extension
MIP 118 - MORPHO Token Deployment and Incentives on Hyperliquid
MIP 111 - Switch Morpho Rewards Stack to Merkl
MIP 124 - Vault V2 Specific Incentive Campaign
MIP 119 - Spark Rewards Update
MIP 114 - Incentives Distribution on Arbitrum
MIP 117 -- Arbitrum Rewards Extension
MIP 127 -- External Grants Rewards Framework
2

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.

2 Likes
3

As a reminder, the Morpho Association has switched to the Merkl stack to handle rewards computation and claiming processes. Those campaigns now use variable rates.

The next campaign will have the following specifications:

  • 1-month fixed budget campaign
  • Budget per loan asset:
    • On Ethereum:
      • USDC: 275,930 MORPHO
      • USDT: 25,402 MORPHO
      • WETH: 31,392 MORPHO
    • On Base:
      • USDC: 122,444 MORPHO
      • WETH: 18,808 MORPHO
      • EURC: 13,616 MORPHO
4

The Morpho Association proposes to put 5k MORPHO as incentives on EURCV markets following the recent Forge integration of Morpho.

The campaign would run from Thursday October 2, 7 PM CET for a week and will be renewed for the following weeks.

5

For the month of February the Morpho Association recommends the following updates in distribution.

On Base:

  • USDC and WETH: reduce spending to 0 as rates are competitive enough
  • EURC: cut by 30% (8,400 MOPHO)

On Ethereum:

  • USDC: cut by 10% (216,000 MORPHO)
  • WETH: reduce spending to 0
  • USDT: keep the same expenditure as last month (85,000 MORPHO)
  • EURCV: cut by 80% (1,400 MORPHO)
  • PYUSD: distribute 38,136 MORPHO as PYUSD market is growing on Morpho

We also recommend adding 10% incentives for Morpho Vault V2 uniquely for the loan assets where incentives are being distributed.

1 Like
6

For the month of March the Morpho Association recommends the following updates in distribution.

On Base: cut all incentives.

On Ethereum:

  • USDC: 97,200 MORPHO
  • USDT: 76,500 MORPHO
  • EURCV: 700 MORPHO
  • PYUSD: 52,981.42 MORPHO

For Vault V2 on Ethereum specifically:

  • USDC: 10,800 MORPHO
  • USDT: 8,500 MORPHO
  • PYUSD: 5,886 MORPHO