The Morpho DAO to Enable Transferability for MORPHO

November 18th, 2024

The Morpho DAO (”DAO”) has voted to enable the transferability of the MORPHO token, advancing Morpho’s mission to make financial infrastructure a public good. Since launching in June 2022, the DAO has progressively distributed ownership to the protocol’s users, strategic partners, risk curators, and other contributors aligned with Morpho's long-term vision. Now, by enabling token transferability, the Morpho DAO allows anyone to own and govern the Morpho network.

As discussed by the community, this move is a key step toward realizing Morpho’s mission by empowering a broader range of participants to engage with and contribute to the Morpho ecosystem. It will bring new perspectives and ensure that DAO decisions reflect the interests of a more diverse community.

The Morpho DAO is expected to enable transferability on Thursday, 21 November 2024.

Community-Driven Approach

The Morpho DAO took a unique approach with the MORPHO token, addressing common criticisms of token launches often controlled by a small group or centralized entity. By initially deploying MORPHO as a non-transferable token, the DAO allowed itself—not any centralized entity or individual—to decide when to enable transferability, ensuring a decentralized and community-driven process.

During the non-transferability phase, the DAO prioritized distributing ownership across three key pillars: users, contributors, and strategic partners. Users gained network ownership and helped shape its evolution; contributors enhanced the technology, network, and accessibility based on user feedback; and strategic partners offered capital and guidance.

Now, with a robust ecosystem of contributors, tens of thousands of users, and a network poised to become a cornerstone of decentralized finance, the DAO voted to take the next step—making the MORPHO token transferable to further its mission of transforming financial infrastructure into a public good.

The MORPHO token

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

MORPHO holders can vote on changes or improvements to the protocol, including:

Future initiatives to grow the Morpho protocol;
Deployment and ownership of Morpho smart contracts;
Turning on/off the fee switch built into the Morpho smart contracts;
Govern the DAO Treasury.

Legacy and Wrapped MORPHO

The original, now legacy, MORPHO token was deployed as an immutable contract and lacked functionality associated with onchain vote accounting. The Morpho DAO voted to create a contract to wrap the legacy tokens into wrapped MORPHO to enable onchain vote tracking functionality in MIP-75.

In addition to onchain vote tracking, using an upgradeable token makes it possible to conform to a crosschain interoperability standard in the future, minimizing friction for MORPHO holders who want to move their tokens between chains.

Although legacy MORPHO tokens can be freely converted to wrapped MORPHO 1:1 via the wrapper contract, there could be a risk that legacy tokens might be used mistakenly in external integrations, such as exchanges. To prevent this, only the wrapped MORPHO will be transferable. Users will be able to wrap existing legacy MORPHO tokens on the Morpho App once transferability is enabled.