Considering MORPHO Distribution

Thank you Ryan for this post! Messari’s engagement in governance forums is highly appreciated, I’ll try to address the different points!

If it is possible to enable links, I have some links/images I would like to include!

To be able to publish links and pictures, you have to become trust level 1, by spending some time in the forums. I manually upgraded you to this status so feel free to edit your post!

With Age 4 ending on May 22, 2023

In case you missed it, Age 5 has started!

we do not have deep insight into the arrangements made with the investors of the protocol

I am sorry this was not clear enough. I tried to clarify distributions in the documentation here. Additional information on investors can be found in this 2nd fundraising announcement or in MIP1.

Based on MORPHO emissions as of the end of Age 4, the top delegate controls 29% of the total voting weight, the second delegate controls 27% and the third delegate controls 15%. Comparatively, Aave’s top three delegates control 23%, 9% and 9% of the voting weight.

This metric is very interesting. Token delegation indeed appears more concentrated in Morpho. Let’s remind nonetheless that the Aave protocol was started 6 years ago while Morpho was started a year and a half ago. A correct and fair decentralization takes time and I expect this concentration to be diluted over the coming years.

Should there be a limit on the maximum number of MORPHO a delegate can receive?

At first sight, this could be interesting, do you have a maximum percentage in mind? Where you thinking about making it sybil resistant?

At first sight, this looks interesting! We will have to look into the specifics of how this can be done technically but Snapshot should easily allow this. Do you have a maximum percentage in mind?

What metrics should we consider when thinking about enabling the transferability of MORPHO?

While three instances of Morpho Optimizers were deployed already, the majority of the work done by the initial team on Morpho is still not public yet. If the token were to be liquid, this would create a large information asymmetry between the initial team/investors and other market participants. This is why we are not in favor of an immediate token launch.

Moreover, we may want to establish robust governance processes (introducing a cap for delegates could be a part of it) before enabling transferability, to avoid events such as what happened with Tornado Cash recently.

I hope this answers/clarifies your questions.

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