MIP60 - Introducing Morpho Olympics - Rewarding MetaMorpho Vault Curators

Summary

2024 marks an Olympic Year, and the Morpho Association proposes that Morpho joins the festivities by introducing the Morpho Olympics, where up to 10M MORPHO would be awarded as grants to MetaMorpho curators.

Rationale

MetaMorpho vaults play an essential role in Morpho’s vision for lending. They serve as the primary intermediary between the protocol and lenders, curating risk and optimizing returns and liquidity.

Offering rewards to MetaMorpho curators is strategic because it:

  1. Makes curating vaults more profitable and therefore more attractive;
  2. Aligns risk curators with the success of Morpho;
  3. Encourages them to focus on growth rather than direct revenue (thus encouraging lower fees);
  4. Provides them with resources to negotiate with third parties.

Details

1. Eligibility and Grant Calculation:

Curators of MetaMorpho vaults meeting specified Total Supply thresholds are entitled to receive grants in MORPHO tokens, as outlined in the table below.

Total Supply denotes the 2-month average of the notional USD for deposits that can be borrowed in MetaMorpho vaults open to user deposits per individual curator, excluding deposits from algorithmic market operations (i.e. issuers of stablecoins supplying into vaults, whether curated by themselves or not).

The grant amounts listed in the table are cumulative, reflecting the total amount a curator would have received upon reaching a certain threshold, including any previous grants.

Total Supply (USD) Cumulative Grant (MORPHO)
2,000,000 10,000
5,000,000 25,000
10,000,000 50,000
15,000,000 75,000
20,000,000 100,000
30,000,000 150,000
50,000,000 250,000
75,000,000 375,000
100,000,000 500,000
150,000,000 750,000
200,000,000 1,000,000
300,000,000 1,500,000
500,000,000 2,500,000

2. Grant Disbursement Procedure:

Total Supply assessments will occur on:

  • July 31st
  • October 31st
  • January 31st
  • April 30th

Upon a curator reaching a specified threshold during a Total Supply assessment, it will be eligible to the corresponding grant, adjusted for any prior grants received in previous quarters.

Within 7 days following the assessment, a forum post will be published, detailing each eligible curator and their corresponding grant.

Grants will be distributed to vault curators within 30 days after the assessment, following a one-year linear vesting schedule.

3. Discretionary Withholding:

The DAO reserves the right to withhold a grant if it suspects actions that are not conducive to the growth of the protocol, including but no limited to:

  • Suspicion of artificially inflating Total Supply;
  • Questionable markets in which funds are deposited;
  • Doubts about the integrity of a vault curator.

4. Program Closure and Adjustment:

The grant program will cease upon the distribution of 10M MORPHO tokens as grants.

In instances where the total grant amount surpasses 10M MORPHO, final payments will be adjusted proportionally to maintain this limit.

If the 10M MORPHO limit is not reached within eight quarters from program inception, the program will be terminated.

Next Steps

After discussions with the community, we will push a vote on Morpho’s Snapshot

DISCLAIMER: The approval of a governance proposal or distribution of incentives by Morpho DAO does not signify its endorsement of any protocol, vault, market or token. Morpho DAO makes no representations or warranties on any kind with respect to the information, descriptions, protocols, vaults, markets or tokens included in or associated with any governance proposal, including the accuracy, reliability, suitability or completeness of any information contained in any proposal. Your use of such protocols, vaults or tokens is entirely at your own risk. The value of tokens and other digital assets can increase or decrease and there can be a substantial risk that you lose money buying, selling, holding or investing in tokens or other digital assets.

7 Likes

Hey, congrats for this interesting proposal. I’m personnaly favorable to this proposition, which will definitively boost the TVL.
I would make the case for a few adjustments however:

  • it would be better for the recruitment of new skilled curators that the grant is not reserved to the few whitelisted curators at the beginning of the program. This could mean postponing the first assessment date by one or two months depending on when the curation becomes fully permissionless.
  • I would recommend to track and reward variations of tvl between two dates (or a mixed of tvl and variation of tvl if it sounds more consensual) rather than tvl. An incentive program is uselees to incentivize milestones already achieved, unless the Morpho team wants to reward past efforts to grow tvl, and not future efforts. In the former case, this does not do much for the growth of future tvl.
  • In particular, granting the same reward again and again every three months for the same level of tvl would not be efficient, but not sure to read it right in the proposal.
1 Like

Hey @prevert,
Thank you for your thoughtful comment.

Clarifying Grants and Payments:
If a curator meets a Total Supply threshold during an assessment, the payment they receive at this assessment will be the difference between the Cumulative Grant amount for that threshold and any grants previously received.

Payment=max⁡(0,Cumulative Grant(Total Supply)−All previous grants received)

This ensures that the total number of MORPHO tokens a curator receives reflects the highest threshold they have reached, regardless of the path taken to reach it.

Here’s an example of two vaults reaching a 20M Total Supply in different ways but ending up with the same number of MORPHO received:

Assessment 1 Assessment 2 Assessment 3
Curator A Total Supply 5M 10M 20M
Cumulative grant 25k 50k 100k
Payment to be made 25k 25k 50k
Curator B Total Supply 5M 20M 20M
Cumulative grant 25k 100k 100k
Payment to be made 25k 75k 0

Addressing Your Points:

  1. Note that vault creation is already permissionless, and any curator can ask to be displayed on the interface by publishing a forum post presenting the vault.

    Also, waiting a few more months won’t change much, as existing curators won’t receive additional payments for thresholds they would have already been paid for.

  2. If we were to reward variations, a new curator starting now would end up getting more rewards for reaching 20M Total Supply than a curator who already has 10M. This could be considered unfair.

    From Morpho’s perspective, the grant system is designed not only to reward future growth but also to align curators with Morpho’s goals and provide them with resources to continue their activities. Therefore, rewarding past efforts also makes sense.

  3. As I hope it is now clear with my explanations, if the Total Supply remains the same in a future assessment, no additional payment will be made.

I hope this helps make sense of the proposal. Don’t hesitate if you have further remarks!

Thanks for those very clear explanations which answer all my concerns.

The vote is live here!

Clarification on Terminology:
The term “curator” may be ambiguous, as it is commonly used to describe the agent that administers a vault, but it also refers to a very specific role in the MetaMorpho codebase. Referring to these roles for consistency, grants will be calculated for and assigned to agents that hold the owner role of MetaMorpho vaults.