Summary
Authorize distribution of up to 135,000 MORPHO tokens (approximately $250,000) as incentives on the Arbitrum instance of the Morpho Protocol.
Context
The Morpho Association has identified Arbitrum as a strategic growth opportunity for the Morpho Protocol. In particular, Arbitrum is demonstrating strong traction with onboarding a variety of RWA issuers, as well as institutional actors like Robinhood building on the Arbitrum stack.
Furthermore, the upcoming DRIP program is expected to offer growth opportunities.
Detail
Authorize a maximum of 135k MORPHO tokens for distribution on Arbitrum. Based on the experience of Unichain incentives distribution, the Morpho Association proposes that flexibility be allowed for the rewards strategy to allow a dynamic response to early demand:
- for the first four weeks of incentives distribution, the Morpho Association may adjust the incentives rate for supply to or borrow from any market as needed, without adhering to the existing Optimistic Rewards Framework
- following the first four weeks, the standard rules of the Optimistic Reward Framework will apply
This approach will balance transparency and predictability of rewards changes with the uncertainty around which collateral assets will see demand on a newly incentivized deployment.
Strategic Considerations
The goal of this incentives program is to establish Morpho as a leading venue for lending and borrowing on Arbitrum. To maximize the effect of the campaign, the Morpho Association proposes that incentives focus on a single lending asset, USDC. Other lending side assets may be supported, but a concentrated approach is expected to maximize incentives efficiency.