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Motivation

The Morpho Token, or MORPHO, is the Morpho Protocol's governance token. Morpho DAO - made up of MORPHO holders and delegators - governs the Morpho Protocol. The governance system uses a weighted voting system in which the amount of MORPHO tokens held determines voting power.

MORPHO holders will be able to vote on changes to the protocol, including:

  • Deployment and ownership of Morpho smart contracts;
  • Turning on/off the fee switches built into Morpho Optimizer and Morpho Blue;
  • Decentralize the hosting of the front end to the protocol and the governance;
  • Govern the DAO Treasury.

Initial Distribution​

The Morpho Token was deployed by the Morpho Association at the address: 0x9994E35Db50125E0DF82e4c2dde62496CE330999.

The token has a maximum total supply of 1,000,000,000 MORPHO.

As of June 2024, the MORPHO distribution is as follows:

Morpho distribution
  • The amount of MORPHO distributed to Users is subject to increase due to ongoing and future MORPHO rewards programs.
  • The early contributors category includes MORPHO converted following a decision of the Morpho DAO from Morpho Early Contributor Tokens (MECT) which were initially allocated to Morpho Labs’ contributors, independent researchers, and advisors.
  • The Reserve for Morpho Labs includes unallocated tokens set aside by the Morpho DAO for Morpho Labs contributors.

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.