The Morpho DAO is in the process of optimizing MORPHO reward rates, and has recently completed a series of rates reductions. Requiring a governance proposal for every change creates substantial work for delegates, and imposes a minimum duration on changes. Based on the suggestions from delegates, this is a proposal for an optimistic framework to handle future rewards rate changes.
Proposal
Authorize the Morpho Association to submit rewards rate adjustments without a governance vote on Ethereum, Base, and future networks where MORPHO rewards are allocated by the DAO and distributed under the scalable rewards model, subject to the following restrictions:
maximum of ±30% change in global rewards rates per week
maximum of ±30% change in per asset rates per week (for example, stablecoins currently receive a higher MORPHO reward rate than other assets)
all changes to be posted on the forum at least 24 hours in advance of implementation
reward rate cannot increase higher than 50% of the current level for any asset without a vote
Benefits
Allow for more frequent adjustments
Reduce number of governance votes
Encourage smaller optimizations once rewards rate is close to target (that might not make sense to do in the current framework given the time between a change being proposed and taking effect)
I’m a big fan of optimistic governance. However, in our industry optimistic governance has always been hard-coded for proposals to pass unless token holders veto. Giving hard-power to token holders has regulatory, legal, cultural, and security benefits.
Similar to how curators can implement changes and install a guardian to veto any changes, i’d recommend the same procedure & process for the rewards rate adjustment. The Association can change the reward rate optimistically but there should be a duration in which token holders can veto this change, otherwise it will pass and be executable.
I’d recommend guardians weigh in on the time-frame that best suits them whether 7 is sufficient or 3 to move more quickly.
An explicit veto period is sensible, but should be balanced against the objective of reducing the latency around rewards rate changes.
Therefore, I suggest the idea that we stick with a 24 hour notice as mentioned in the original proposal, with an addendum that if a Snapshot vote is created calling for a cancellation or adjustment before the change is implemented, it will be delayed until the conclusion of the vote. For simplicity, veto can use the same 3-day voting duration as the current Snapshot votes, so we don’t have to make any separate track or voting strategy.
Unless there’s a strong objection, I will post to Snapshot tomorrow.
Thanks for this discussion. We’re generally in favor of reducing friction in the governance process. Manually approving each rewards rate change can become tedious and largely unnecessary. @Leuts brings up a good point w.r.t. implementing a sort of “check” on the power to optimistically change the rates. No objections from our end, happy to continue to a Snapshot vote.
After some further conversations about the model, I am thinking it’s best to proceed to a vote with the original proposal. Instead of making a special veto rule for this process, it’s simpler to try out the framework, and retain the possibility of using a new vote to cancel or amend it through the usual process as needed. Will proceed to Snapshot on Monday.
We have voted For the Optimistic Rewards Rate Adjustment Framework. Granting the Morpho Association flexibility within clear boundaries improves operational efficiency and governance responsiveness.
Additionally, we’d like to highlight Lido’s Easy Track governance model as one of the potential inspirations. Easy Track offers a structured yet streamlined approach to governance decisions, allowing token holders to veto proposals easily while minimizing overhead. This could serve as an interesting reference to further enhance Morpho DAO’s governance processes in the future.