Summary
To support a scalable lending supply growth to support the new Coinbase integration, authorize 50% of the standard MORPHO reward rate for Spark USDC deposits in the markets integrated by Coinbase, up to a total deposit size of $100M.
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. This is a proposal to make an exception to this rule given the potential surge in borrowing demand from the recently announced Coinbase integration with Morpho. Sky/Spark is one of the largest onchain allocators of USDC, and creating a clear incentive for them to deposit will minimize the likelihood of liquidity constraints in the markets used by Coinbase.
This proposal would make USDC deposited by Spark on Base to the cbBTC markets used by Coinbase (and other markets if they are integrated in the future) eligible for 50% of the standard MORPHO reward rate (at time of writing, approximately 5.11% APR, so Spark would receive ~2.555% APR on up to 100M deposited).
Next Steps
If authorized, this proposal would apply from the start time of the Coinbase integration, which was announced at 3:45 PM CET on Thursday, January 16.