Origin <> Morpho Blue - Incentives in the wOETH/WETH markets


Origin Protocol intends to distribute OGN as incentives in the wOETH/WETH market over three months, starting on June 3, 2024.

We propose that the Morpho DAO handle this distribution and request that MORPHO tokens be included as additional incentives.

Origin x Morpho Blue

Unlike traditional lending pools, Morpho Blue allows Origin to take a more targeted approach to incentivizing specific use cases. On Morpho Blue, we can incentivize a specific pair of assets with a strong use case that will help drive further adoption of our token. Wrapped OETH (wOETH) falls into this category.

Wrapped OETH is an ERC-4626 tokenized vault that improves the composability of Origin Ether (OETH). Our flagship product, OETH, was launched one year ago as a liquid staking yield aggregator on Ethereum and has grown to $130 million in TVL with support from top-tier protocols including EigenLayer and Pendle. OETH has since transitioned to become a pure LST with the promise of delivering better risk-adjusted yield and a superior peg to ETH. This makes it the ideal building block for other DeFi protocols and for borrowers seeking leveraged staking strategies.

Re7 Labs has recently deployed a Morpho Blue market for wOETH and agreed to add it to the Re7 WETH MetaMorpho vault with an initial supply cap of 2,500 WETH. This will be the first blue-chip money market integration for OETH and we are excited to bring new utility to our users.

Proposal Details

We plan to distribute $45,000 in rewards in OGN in the wOETH/WETH market over three months, starting on June 3, 2024. OGN is listed on top exchanges such as Coinbase and Binance with an average daily trading volume of $17,282,355 over the past 30 days.

We propose that the Morpho DAO handle this distribution by integrating it into the Standard method for distributing incentives on Morpho Blue markets.

The growth of such a market will benefit Morpho, therefore it’s prudent for the Morpho DAO to distribute MORPHO tokens over the three months to help incentivize its expansion.

Should the proposal be accepted, we will send the aforementioned amount to morpho.eth.

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Hi @micah, thanks for the proposal.
Great to see OETH coming on Morpho and your willingness to develop it!

Since the Rewards app is operational, you can now create the OGN distribution program and no longer need the Morpho DAO to handle this distribution.
Regarding MORPHO, we will be proposing very soon a new scalable method to distribute rewards, which should be operational somewhen in June. In the meantime, we propose to allocate a total of 6,667 MORPHO on the wOETH/WETH for the first 30 days. The market would then be integrated into the new distribution system.

NB: distribution of incentives by the MORPHO DAO does not signify endorsement of market risks.

Wrapped OETH is an ERC-4626 token and can be used as a collateral in a Vault? I thought only ERC-20 could be used as collateral.

I can’t speak to what can and can’t be used as collateral on Morpho, but ERC-4626 tokens are still ERC-20 compliant. It is just an extension to the token standard providing more features.

The vote is live here.

Yes @Super_Chameau, as @micah said, an ERC4626 token inherits from the ERC20 standard, so it’s, in theory, compatible. This is, of course, something to nuance as some implementations do not follow the standards well and/or have particular behaviors that must taken into account as well before interacting with such a market.

Thanks you @micah and @MerlinEgalite for your answers. One additional question @MerlinEgalite : can an ERC-721 token be used as a collateral in a MetaMorpho Vault?

Unfortunately ERC721 tokens cannot be used as collateral on Morpho Blue.

Note that MetaMorpho vaults are only for lenders. You can find more information on MetaMorpho vaults here.

Thanks @MerlinEgalite, this is very helpful. I understand that Morpho Blue is in fact a set of markets represented by a uniqueKey where you have one asset that can be borrowed against one given collateral and Vaults are built on top of these different markets.

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