To date, MORPHO incentives have been distributed to markets alongside incentives from the collateral asset project in a co-incentive setting. These programs operate in a two-sided commitment to a reward amount distributed over three months.
This framework is not suitable for all markets. In particular, some markets are not linked to a project, or the project cannot distribute rewards to them. Some of these markets are essential for the growth of Morpho Blue, such as markets with blue chip assets on both collateral and loan assets.
To organize reward distribution on such markets, we propose to use this forum discussion as a thread. This is motivated by the desire to have a flexible setting where emission rates are meant to be adaptable, as there is no kind of commitment with any project. Any rate update will still need to be validated by a vote on 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
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Rewards on WBTC/USDT and WBTC/USDC
To start, we propose to distribute rewards on WBTC markets. Indeed, WBTC is one of the most used collateral with billions deposited in lending protocols.
The markets concerned, with their associated rewards emission, would be:
- WBTC/USDT (86%, Morpho ChainlinkOracle): 7777.77 MORPHO per day
- WBTC/USDC (86%, Morpho ChainlinkOracle): 3888,88 MORPHO per day
Distributions would begin on February 9th.
For reference, the MORPHO emission rate on the wstETH/USDC market will be 7777.77 MORPHO per day from February 9th.
The rate for WBTC/USDT is higher as there is a need to bootstrap USDT vaults, the first of which are expected to be launched this week.
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Incentivizing PYUSD:
PYUSD is PayPal’s stablecoin issued by Paxos. It has strong potential as it has reached $300 million in TVL and will benefit from PayPal’s global network.
As PYUSD is issued by a traditional player, it seems that playing the RWA card with the wbIB01/PYUSD market could be well suited to potential users. The development of such a market would also highlight the versatility of Morpho Blue.
The market concerned, with its associated rewards emission, would be:
- wbIB01/PYUSD (96.5%): 500 MORPHO per day
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The current campaign for rewards on the wstETH markets will end on April 9th. We suggest continuing to distribute MORPHO on these markets to further bootstrap them.
Some MetaMorpho vaults have started to list wstETH / WETH markets with exchange rate oracles. We propose to distribute rewards on these markets as well to help the migration of liquidity.
The markets that would receive rewards, along with their associated rate, are
- wstETH/USDC (86%, Morpho ChainlinkOracle): 7 777,78 MORPHO / day + 0,425 wstETH / day from Lido
- wstETH/WETH (94.5%, Morpho ChainlinkOracle): 6,222.22 MORPHO / day + 0,34 wstETH / day from Lido
- wstETH/WETH (94.5%, Morpho ChainlinkOracleV2 Exchange Rate): 777.78 MORPHO / day + 0,0425 wstETH / day from Lido
- wstETH/WETH (96%, Morpho ChainlinkOracleV2 Exchange Rate): 777.78 MORPHO / day + 0,0425 wstETH / day from Lido
These rates would be set on April 9th at the end of the current campaign.
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The rewards rate on wstETH / WETH markets creates an important discrepancy with other WETH markets. Among them, the sDAI / WETH (86%) market is the largest one not being incentivized, with more than $10M supply.
To avoid losing volume on this market, and to further consolidate it, we propose to distribute 2534 MORPHO per day.
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The Steakhouse PYUSD vault is showing strong potential with steady growth now reaching $5M in deposits despite a low reward rate. We propose to multiply the reward distribution on PYUSD markets by 3 to bring the total to 1500 MORPHO per day. Following the relative sizes of the markets, we propose to split it this way:
- WBTC/PYUSD (86%): 1000 MORPHO per day
- wstETH/PYUSD (86%): 500 MORPHO per day
The wbIB01/PYUSD (96.5%) market, which is currently the only one receiving rewards, would no longer receive any.
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