CP116: RWA Lending Market Liquidity Bootstrap

cp: 116
Title: RWA Lending Market Liquidity Bootstrap
authors: @Imdior, @GraysonAlto
uses-component: cp4, cp2
technical-proposal: yes
requires-onchain: yes
impacts/modifies: -
status: passed
date-proposed: 2024-06-21
date-ended: 2024-07-07

Short Summary

Initiate bootstrap incentive rewards liquidity for the RWA Lending Market on Morpho

High level objective

This proposal is for providing 60,000 CFG incentive rewards to be distributed as rewards for the RWA Lending Market. These rewards will last for 60 days following the launch of the LTF/USDC pair.


The CP103: Launch an RWA Lending Market on Morpho was recently approved by the Centrifuge DAO.
The bootstrap liquidity is critical during the launch and in order to attract lenders.

Description of Activity

This proposal covers the first 2 months of the initiative, based on the planned amount of CFG to be supplied (1000 CFG per day). It is important to note that lenders in the market not only earn CFG rewards, but baseline borrow interest, and MORPHO token rewards as well.

The following table shows what SOLELY CFG reward APYs would look like based on the amount of total market supply. This is at the current price at the time of writing of $0.46 per CFG.

Please keep in mind that this is a fixed rate supplied per day, so naturally, the overall reward decreases linearly as TVL increases. A fixed rate per day is the default and recommended structure from Morpho.

Change or improvement

  1. Initiate liquidity bootstrap and provide 60,000 CFG for 60 days once the market launches and deposit these rewards into the RWA Lending Market on the Morpho Rewards Distributor Contract [ 4eEqmbQMbFfNUg6bQnqi9zgUvQvSpNbUgstEM64Xq9FW58Xv ].

  2. Distribute 1000 CFG per day as rewards across the RWA Lending Market on Morpho.

Alignment to the mission of Centrifuge DAO

By creating early liquidity incentives, we will bootstrap early participation in the market which will attract more lenders, borrowers and issuers. By capping the token rewards, we’re limiting the Centrifuge out of pocket cost, while still supporting the initiatives that will help us build key infrastructure around Centrifuge. All of this serves the purpose of helping grow the TVL of Centrifuge, and maintaining our position as the largest RWA protocol.

02-07-2024 The proposal has been submitted on Github as CP116


I hope I have some assets I can lend out on Morpho so I can earn more CFG!

1 Like

Simply USDC will do :slight_smile:

1 Like

:hammer_and_wrench:This is critical next step for broad US market adoption.:rocket:

Council Motion 97 was submitted and passed in the Centrifuge council.

Referendum 59 is now live for all CFG token holders to vote on.

If passed, this will approve a treasury funding of 60,000 CFG to be paid out in the next spending period which starts at block #5,846,400 (currently around 17.30 CET on Sunday).

:ballot_box: Vote in the portal: CP116: RWA Lending Market Liquidity Bootstrap

:ballot_box: Vote on SubSquare: CP116: RWA Lending Market Liquidity Bootstrap

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Referendum 59 for CP116: RWA Lending Market Liquidity Bootstrap passed at block #5841125 (7th July 2024 at 6.51 am CET) and the funds were already transferred to the Morpho Rewards Distributor Contract (4eEqmbQMbFfNUg6bQnqi9zgUvQvSpNbUgstEM64Xq9FW58Xv).

Thank you for voting everyone!