To enhance the Morpheus ecosystem this proposal introduces a comprehensive framework for integrating new yield-generating assets from Ethereum, Layer 2 solutions, and other blockchains into Morpheus. This strategic initiative is designed to not only diversify the capital avenues but also to broaden its user base by tapping into new communities and ecosystems. The expansion hopes to extend Morpheus’ reach across multiple venues, bringing in fresh perspectives and opportunities for growth.
This expansion will enable new participants to engage with Morpheus, facilitating its spread across a variety of digital landscapes and asset classes. Such diversification is crucial for enhancing the ecosystem's resilience and adaptability. Moreover, this approach empowers Morpheus to harness the market signals generated by Capital Providers, effectively allowing market dynamics to potentially influence and guide its core functionalities over time. This unique strategy envisions Morpheus as an adaptive entity, capable of intuitively migrating or adjusting its infrastructure as new technologies emerge.
The following document outlines a standardized process for onboarding new assets: a detailed process for suggesting, integrating, and managing yield from new assets. It covers the calculation of yields, the distribution of rewards, and the technical adjustments required for this expansion, all while ensuring the process remains transparent, equitable, and in alignment with Morpheus' core principles of open-source innovation and community-driven development.
Before integrating new yield-generating assets into Morpheus, several prerequisites must be met and included in the proposal to ensure compatibility, security, and effectiveness. These criteria are designed to maintain the integrity and objectives of Morpheus while fostering a safe and productive environment for expansion.
- Proven Security: Assets must have undergone thorough security audits by reputable firms, demonstrating a strong record of security and stability.
- Sustainable Yield Generation: The asset should have a clear, sustainable mechanism for yield generation.
- Active Support Network: The presence of an engaged community and dedicated developer support ensures ongoing improvements and responsiveness to issues.
- Liquidity and Market Structure: Assets need to exhibit significant market liquidity and a well-established market structure, facilitating efficient transactions and interactions within the Morpheus ecosystem.
- Commitment to Decentralization: Assets that uphold decentralization principles are preferred, reflecting Morpheus' vision for a decentralized financial landscape.
- Minimum Circulating Market Cap: To ensure economic viability and reduce volatility, assets must have a minimum circulating market capitalization. This minimum will be determined upon further discussion with the community.
- Operational Testnet Requirement: Assets must possess an operational testnet environment where full integration testing can be conducted. This ensures that any technical or compatibility issues can be identified and resolved prior to live deployment, guaranteeing a smooth integration process.
- Oracle: An oracle price for the asset is required to calculate the daily share of MOR Capital Provider emissions.
When proposing assets located on new blockchains or Layer 2 solutions for integration into Morpheus, the proposal must include the following detailed information beyond the general prerequisites to ensure a thorough evaluation and seamless integration. These additional requirements are crucial for assets outside the Ethereum mainnet, as they address unique challenges and opportunities presented by cross-chain interactions. For each new blockchain or Layer 2 where Morpheus does not currently operate, it is essential to ensure that MOR rewards will be claimable on that venue, a plan to establish Protocol-Owned Liquidity (PoL) should also be presented.
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Cross-Chain Infrastructure and Testnet Verification.
For assets not native to Ethereum, the presence of existing cross-chain infrastructure is mandatory. Furthermore, this infrastructure must be verifiable within a testnet environment, allowing for comprehensive testing of cross-chain functionalities. This ensures that assets can seamlessly interact within the Morpheus ecosystem, maintaining the integrity and fluidity of cross-chain operations. -
Infrastructure.
Will the MOR token / liquidity pool be established on the new venue? If so, points #3 and #4 below should be satisfied. Regardless, the proposal should detail the logistics of cross-chain MOR minting or transferring yield from the newly added network to Arbitrum, to be utilized as Protocol-Owned Liquidity (PoL). -
Liquidity Pool Initiation.
The new asset proposal should outline a clear initiation plan for the liquidity pool on the new venue. This period serves as a buffer, ensuring that the asset's integration proceeds smoothly and efficiently. Morpheus itself was started with a similar bootstrapping period, details of which can be found here.
The primary topics for this pool initiation plan will include:
- Timeline
- The base asset in the pool
- Source of MOR earmarked to establish initial liquidity pool
- Source of the base asset to establish the initial liquidity pool
- Protocol Owned Liquidy (PoL): As Morpheus expands to environments, it’s essential to establish PoL. A detailed technical implication must be included.
- Submission: Individuals or teams can suggest new yield-generating assets by submitting a detailed proposal to the Morpheus community repository. The proposal must include:
- Comprehensive details outlining the asset prerequisites
- Technical specifications
- Yield generation potential
- Risk assessment
- Weights requested to complete full development
- Review: Submitted proposals undergo a two week review period by the Morpheus community and Code Providers, evaluating the asset's compatibility, security, and yield generation efficiency.
- Discussion & Refinement: Post-review, the submitting individual or team will have one week to provide final responses and incorporate any necessary updates based on the community review.
- Acceptance: An asset is accepted for integration based on Morpheus’ atomic governance framework. It is the work of the GitHub maintainers of the Smart Contract and Capital Provider Morpheus Reference Implementation repositories to ultimately accept the application.
- Development: The submitting individual or team develops the proposed integration. A public repository is required for code review.
- Testnet: A minimum of one month testnet period is required for sufficient community test and audit.
- Audit: A minimum of one comprehensive audit is required. This must be completed by a third party auditing firm. The audit process would earn a different set of weights, proposed by the auditor.
- Mainnet: Once sufficient testing and at least one third party audit is complete the mainnet deployment can commence.
- Yield Calculation: For each approved asset, Morpheus will leverage the LayerZero protocol to calculate the real-time yield generated at every block. This yield will be priced against ETH, to standardize earnings across different assets. For networks without LayerZero support, the proposer of a new asset should specify how the value of yield will be calculated across chains.
- Pro-rata Distribution: Yield contributed by different assets will earn a pro-rata distribution from the Capital Providers' MOR emissions, Capital Providers earn 24% of daily MOR emissions. This ensures equitable distribution based on the value each asset brings to the Morpheus ecosystem.
- Distribution: MOR rewards for Capital Providers on different blockchains and Layer 2’s will be claimable block by block at an estimated 12 second granularity (ETH block time), if that is the slowest block time accepted.
Individuals or teams whose asset suggestions are accepted, merged into the Github repo, and successfully integrated into Morpheus will receive a one-time allocation of Code (24% of MOR emissions) contribution weights. This allocation will be based on the weights requested in the original proposal.
- Ongoing Contributions: The individual or team responsible for creating the integration must maintain and update the entire scope of the proposal. If maintenance is not upheld, their weights are subject to removal, and a new entity may assume the role, with new weights allocated accordingly. This ensures the continued alignment of incentives.
- Audits: All new integrations will undergo thorough security audits to protect the Morpheus ecosystem.
- Performance Monitoring: Continuous monitoring of asset performance, encompassing yield efficiency and risk exposure, is crucial for ensuring alignment with Morpheus' objectives. If the community or Code Contributors deem an asset no longer viable at any time, it may be excluded from the Morpheus ecosystem, with all associated weights revoked.
This proposed framework strategically positions Morpheus to dynamically respond to the free market's dictates, adeptly adjusting its operations to target the most beneficial sectors. Such adaptability aims to substantially mitigate risks tied to market fluctuations and technological changes, ensuring Morpheus has sustainability and continued relevance. The inclusion of new yield-generating assets offers a pathway to diversify and bolster the Morpheus capital foundation, delivering advantages to all involved. This methodical approach promotes a process for asset integration that is transparent, fair, and effective.