The purpose of this engagement is to grant Berachain a non exclusive license of Morpho Blue
Background
Berachain is an innovative EVM-identical Layer 1 blockchain built on the ComeBFT, featuring a novel Proof-of-Liquidity (PoL) consensus mechanism. This high-performance blockchain aims to address key challenges in the decentralized finance (DeFi) space by aligning incentives between validators, protocols, and users. Berachain offers full compatibility with Ethereum tools and smart contracts while providing enhanced scalability and efficiency through its BeaconKit framework. The project utilizes a unique tri-token system consisting of BERA (gas token), BGT (governance token), and HONEY (stablecoin) to create a robust ecosystem that rewards liquidity providers and promotes decentralized decision-making.
On Berachain, governance has the ability to enable enshrined applications that serve as a baseline of product for the ecosystem:
Bex (A DEX),
Bend (A Money Market)
One of these, BEND, is a money market that takes in a limited set of collateral assets, and has HONEY as the only borrowable asset.
Motivation
As the Berachain Foundation, we recognize Morpho Blue’s emergence as a cutting-edge lending protocol in the DeFi space, known for its efficiency and innovative design. Berachain aims to support the expansion of advanced DeFi protocols and proposes integrating Morpho Blue into our ecosystem to enhance lending capabilities within our innovative Proof-of-Liquidity (PoL) environment. This integration will reinforce Morpho Blue’s position as a leading liquidity market across chains and open up new possibilities for growth and collaboration between Morpho and Berachain.
Integrating Morpho Blue with Berachain as the backbone for Bend will enable access to our unique liquidity incentives through the PoL mechanism, while allowing Berachain users to interact with a premier lending protocol. Additionally, it will allow other applications, vault curators, and users to further expand Morpho’s presence onto Berachain through the creation of new Morpho Blue vaults.
Our EVM-identical architecture ensures that Morpho Blue can be deployed without significant reconfiguration, minimizing development efforts and costs.
Specification
Licensing and support
Licensing: Provide Berachain license to fork and operate the code for as long as needed without any exclusivity, limited to deployment on Berachain
Support:
Review and validate protocol integration
Notify any relevant updates or relevant changes on forked code (Berachain will assess internally if something we need to change internally for Bend)
Share automated services needed for set up and operation (Open Source Bot for liquidation and monitoring tools for Admin App live)
Roles and Responsibilities
Berachain:
Develop required smart contract integrations and changes.
Deploy, manage, and monitor smart contracts post-deployment.
Implement and maintain our proprietary front-end, back-end and brand design (UI/UX).
Implement PoL mechanics.
Morpho:
Fork open hour support once a week before deployment and/or give availability for async support where needed
Share availability for organizing call if needed (less than 1 per month) after deployment
Commercial terms
Berachain Foundation proposes to compensate the partnership with the following:
A license fee paid to the Morpho DAO in the form of USDC and BERA tokens, totaling low 7 figures in value (at most recent valuations)
Next Steps
Grant License
a) Once Morpho governance will review and validate the proposal the first step will be issuing Berachain a non-exclusive license for Morpho Blue, enabling Berachain to fork and operate Morpho Blue’s code within the Bend money market framework and its own front-end.
Select and Onboard Vault Curator and Risk Manager
a) Berachain will identify and onboard a qualified vault curator and a dedicated risk manager prior to deployment. The curator will be responsible for setting and monitoring key risk parameters such as loan-to-value ratios, liquidation thresholds, and other metrics tailored to Berachain’s PoL mechanism.
b) This team will work closely with Berachain to ensure alignment on risk management practices and optimal vault performance both before and during the deployment.
Thanks for this exciting proposal, @Berachain-Foundation, which marks Morpho’s first friendly fork proposal! I am supportive of this proposal for the following reasons:
Morpho hasn’t planned to deploy on Berachain in the near term
The Berachain Core team will support/operate the fork under its own name and work with an established Morpho Curator who has deep knowledge of the Morpho stack
The proposal includes a compensation to the Morpho DAO
Morpho Integration team support is scoped and bounded in time
I am supportive of this proposal in general, however, it seems quite light on the terms. Is there any particular reason the license fee amount, etc. is not being shared? It would be interesting to share information on other friendly forks in other ecosystems to see what fees they have generated to find a reasonable number?
Berachain operates under the structure of three enshrined dApps, a native decentralised exchange, a native perps market and also a native money market.
These enshrined dApps are controlled and maintained by the Berachain Foundation themselves.
A direct beta to the success of the chain is the success of the natively enshrined dApps.
If Berachain is “successful”, it is undoubted, that the enshrined dApps, including Bend, will also command a significant amount of sucess.
We’re excited to see the Berachain Foundation in the Morpho Forums requesting a non-exclusive license grant for Morpho Blue. The proposal to integrate Morpho Blue as the backend for Berachain’s enshrined money market, BEND, adds some intriguing benefits for both Morpho and Berachain. Gauntlet favors this proposal, especially considering @0xloth’s stated support and the quality of the Berachain team.
[I am a member of Blockchain at Berkeley, but my views do not represent those of the club.]
COOK GO BEARS. No downside, supporting essentially a new launch on Berachain, getting paid.
Can only join the chorus and say that this is indeed a very interesting and exciting proposal. See no reason not to support this as long as the commercial terms are satisfactory. @Leuts makes a good point re the fee amount, would also be interested to see the figure for comparative purposes.
Great proposal indicative of Morpho’s growing market dominance, hope to see more of them in the future. Would like to get more clarity on two things:
Can you elaborate a bit on the tokenomics of the Berachain morpho fork? In particular the fee structure and how/if the value accrues back to the $MORPHO token.
Also, what would happen to this sanctioned fork if at a later date Morpho decides to launch a canonical version on Berachain?
We appreciate this exciting proposal. We are in favor of this for the following reasons:
Morpho DAO will gain revenue through a license fee, providing financial benefits.
By receiving not only USDC but also BERA tokens, Morpho DAO can gain exposure to the potential upside from the success of Bend and, by extension, Berachain.
The implementation will not demand a significant allocation of resources from Morpho’s core contributors, ensuring that their focus remains intact.
That being said, we are keen to understand the specific terms, such as the exact amount and vesting conditions. @Berachain-Foundation Couldn’t this information be shared with the public?
Thank you, @Berachain-Foundation, for this proposal. This is the first time a friendly fork has been proposed to the community. I’m very excited about it as it is a great acknowledgment of the power of the Morpho Stack.
One of our core values at Morpho is that we’re laser-focused. We try to channel all our resources and efforts toward objectives solely aligned with Morpho’s mission. The fact that the integration support that must be provided is clearly scoped and bounded makes me think this is a great experiment aligned with our values.
I’m sure great learnings will come out of this fork, and finally, the Morpho DAO will share the upsides in case this fork is a success.
For these reasons, I’m supportive of this proposal.
