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Non-Transferability & Future Distribution

If token-based governance allows anyone to own a share of the Morpho network, many token launches are very unfair because the launch date & price are often a centralized decision. Moreover, there is usually a large information asymmetry between the initial team/investors and the potential buyers.

The MORPHO token was launched as non-transferable to tackle those issues, allowing the DAO to turn on transferability anytime. This way, the token launch decision itself will be decentralized.

In our vision, a good equilibrium for the control of a DAO is a clear distribution between:

  1. Users: To own a share of the network and to provide a positive feedback loop on the product.
  2. Contributors: To keep improving and building based on the user's feedback and on their technical vision.
  3. Investors: To provide capital and guidance to fuel those contributions.

The initial distributions for 2. and 3. are described in the previous section. As for 1., it is described in the incentives section.

That said, while three instances of Morpho Optimizers were deployed already, most of the work done by the initial team on Morpho is still not public. This implies that:

  • A quick path to token launch may lead to large information asymmetry.
  • Distribution to users should not happen only during Morpho Optimizer, as tokens should also be distributed for future protocols of Morpho.

While this approach offers a great path to fair and relevant decentralization, a clear trade-off is that it takes a lot of time. We believe it can take years to be achieved. While this is uncommon in a space where tokens become liquid in just weeks, we feel this is crucial to be able to create a very long-term oriented and sustainable ecosystem.