MIP69 - Morpho Association Request for MORPHO

The Morpho Association

The Morpho Association (”Association pour le Développement de la DAO Morpho” or “ADDMO”) is an incorporated French association (association loi 1901) whose main goal is to promote the development and adoption of the Morpho Protocol.

The Association allows the Morpho DAO to perform off-chain actions and manage relationships with strategic contributors such as research Institutes, development companies, freelance workers, advisors, etc. The Morpho Association is the owner of the intellectual property related to the Morpho Protocol, and as such, is also responsible for deploying different versions of the Morpho Protocol (before transferring ownership to the Morpho DAO), the MORPHO token contract, and hosting the Morpho front-end (app.morpho.org).

Past Funding, Spending, and Results

The Morpho Association funds the development and growth of the Morpho Protocol over multi-year periods. So far, the Morpho Association has raised $19.4M in 2021/2022 and has been using these funds to develop and grow the Morpho Protocol. This includes covering the cost of developers, research institutes, security firms that audit the code, marketing, and growth initiatives.

The Morpho Association has successfully established the Morpho Protocol as one of the leading DeFi projects in a relatively short time. The Morpho Association efforts have resulted in the deployment of Morpho Optimizers in 2022 and 2023 (Morpho-Compound, Morpho-AaveV2, Morpho-AaveV3), Morpho Blue and MetaMorpho in January 2024, as well as the Morpho Front-End and Morpho Stack modules (SDKs, APIs, etc). At the time of writing, deployed contracts hold over $3B in total deposits, making the Morpho Protocol one of the largest lending protocols in the world.

Current MORPHO Balance

MORPHO is the governance token for the Morpho protocol. It allows holders to guide Morpho’s future by voting on MIPs (Morpho Improvement Proposals) submitted to the Morpho DAO.

As of now, the Morpho Association holds a total of 5M MORPHO tokens.

  • Initially minted 200M MORPHO
  • Spent on development and growth of Morpho: 195M
  • Remaining Balance = 5M

To accelerate Morpho’s growth trajectory and drive large-scale adoption, the Morpho Association will need additional MORPHO.

Request for MORPHO

The Morpho Association is requesting 120M MORPHO to support the ongoing development and growth of the Morpho Protocol.

This amount would allow the Morpho Association to continue to advance Morpho’s decentralized lending infrastructure, build a globally trusted brand, and scale go-to-market operations.

Advancing Morpho’s Decentralized Lending Infrastructure

  • Research & development of future versions of the Morpho Protocol and periphery smart contracts
  • Develop and maintain user interfaces to increase the accessibility of the Morpho Protocol’s smart contracts
  • Supporting technical and strategic integrations of the Morpho Protocol
  • Maintain the Morpho Protocol’s industry-leading security practices

Build a Globally Trusted Brand

  • Increase the Morpho Protocol’s digital and physical presence
  • Organize and execute global marketing campaigns
  • Enhance educational content, thought leadership, and public engagements

Scale Go-To-Market Operations

  • Develop and manage strategic relationships
  • Expand into new geographic and industry markets
  • Design and support key growth initiatives

Note that none of the requested MORPHO will go towards Early Contributors or Morpho Labs as a token reserve was already established by the Morpho DAO.

Burn and Mint of Tokens

As done with previously, the Morpho Association proposes minting the agreed amount and having the MORPHO DAO burn the equivalent amount. This will allow Morpho Association to apply new vesting conditions to the minted tokens while keeping maximum token supply at 1B MORPHO.

The process would work as follows:

  • (1) The DAO burns 120M MORPHO tokens
  • (2) The DAO removes the transferability right from the Morpho Association. This right today is what allows the Association to create vesting contracts for tokens sold to investors or allocated to contributors. This will act as a control mechanism.
  • (3) The DAO gives a temporary minting right to the Association.
  • (4) The Association uses it to mint 120M MORPHO tokens.
  • (5) The DAO removes the minting right from the Association.
  • (6) The DAO gives back to the Association the transferability rights

Illustrative MORPHO Distribution

The following chart illustrates MORPHO distribution if the Morpho Association were to be allocated 120M MORPHO tokens.

  • The amount of MORPHO distributed to Users is subject to increase due to ongoing and future MORPHO rewards programs.
  • The early contributors category includes MORPHO converted following a decision of the Morpho DAO from Morpho Early Contributor Tokens (MECT) which were initially allocated to Morpho Labs’ contributors, independent researchers, and advisors.
  • The Reserve for Morpho Labs includes unallocated tokens set aside by the Morpho DAO for Morpho Labs contributors.

Hey, first of all, congrats for this spectacular growth for the last two years. The Morpho association has made a great job and I’m entirely supportive of the proposal.
To fully understand the consequences of the proposal, it would be interesting to have the current token allocation. The allocation displayed in the Morpho documentation seems a bit outdated.

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Hey @prevert, thank you for your comment. To clarify, the distribution in the documentation reflects the initial distribution of MORPHO at TGE (token generation event) in June 2022. The current distribution (see attached chart) is the same as the chart shown in the proposal, with the exception that the 120M requested is currently part of the Morpho DAO reserve and not the Morpho Association reserve.

Here is the vote!

Hi @MorphoAssociation : from what I understand, you are planning to mint those 120 M MORPHO tokens in order to raise more funds? Am I correct?

This will dilute the number of existing MORPHO tokens right?

Hey @Super_Chameau,

The MORPHO requested by the association will be used for the purposes described in the post, including but not limited to, research and development, growth, and strategic partnerships.

The total number of MORPHO tokens would not increase - 120M tokens would be allocated to the Morpho Association via the burn and mint process described above, ensuring the maximum supply of MORPHO remains unchanged at 1B.

ok I understand, you will get the 120M MORPHO tokens from the DAO reserve (via the burn and mint process you described), so overall there are no mint of new tokens, and therefore no inflation.

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