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zeekayandHanzo Dev
2ae0219c29
MOR at $1.58, $14.3M cap, about $1.3M of DEX depth and $57K of daily volume, from CoinGecko and GeckoTerminal. Figures derived from them move with them: a $100K sell is now about two days of volume rather than eleven, and the emission worked example uses today's ~12,050 MOR/day. The protocol-owned share is stated as most of the depth; the exact share was an August read. Co-authored-by: Hanzo Dev <[email protected]>
83 lines
4.7 KiB
TeX
83 lines
4.7 KiB
TeX
\documentclass[11pt,a4paper]{article}
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\usepackage{../shared/luxcover} % black cover (self-contained, TikZ logo, no assets)
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\usepackage{../shared/proposal} % \proposalhead helpers and the stake environment
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\usepackage[utf8]{inputenc}\usepackage[T1]{fontenc}
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\usepackage{amsmath,amssymb}
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\usepackage{listings}\usepackage{xcolor}\input{../shared/lstlang}
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\newcommand{\code}[1]{\texttt{\small #1}}
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\newcommand{\prov}[1]{{\color{muted}\scriptsize\sffamily[#1]}}
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\title{Self-Repaying Lending}
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\author{Zach Kelling\\\textit{Lux Industries, Inc.}\\\texttt{[email protected]}}
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\date{2026}
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\begin{document}
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\luxcoverpage
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\sloppy
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\proposalhead{Self-Repaying Lending Against MOR}{%
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About \$20M of stETH sits in Morpheus and pays the depositor who supplied it nothing they can
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spend. \code{lux/liquid} makes that stETH borrowable without a sale and lists MOR as collateral for
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the first time.}{ADOPT-04}
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\noindent\textbf{The deposit pays the treasury, not the depositor.}
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Third-party depositors supply roughly \$20M of stETH to the Morpheus capital pool \prov{verified}.
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The yield, on the order of 5\%, routes to Aave v3 through \code{DistributorV2.sol}
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(\code{@aave/core-v3 IPool}, line~10) \prov{verified} and accrues to the protocol treasury. Seventy-five
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percent of that treasury flow funds a buyback, about \$511K per year \prov{verified}. The depositor is
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left holding a claim on MOR emissions and stETH they cannot spend without unwinding the position.
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MOR does about as little. It farms emissions or it trades; market cap is about \$14M and its
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collateral use is zero \prov{verified}. Neither the collateral nor the token can be borrowed against
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without giving one up.
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\vspace{0.35ex}
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\noindent\textbf{The fix: \code{lux/liquid}.}
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\code{lux/liquid} (MIT) is a self-repaying lending engine on Lux. Deposit a yield-bearing asset into
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\code{VaultV2} and mint a transferable 1:1 synthetic against it, up to the position's
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collateralization floor \prov{verified repo}. The collateral keeps yielding; that yield is harvested
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and burned against the debt, so the balance owed falls on its own with no repayment to schedule.
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Capital does not sit in one venue. It routes through about a dozen risk-capped adapters, among them
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Aave, Compound, Lido, EtherFi, Pendle, Morpho, Yearn, Ethena, EigenLayer, Maker DSR, and native Lux
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strategies \prov{verified repo}. One counterparty's failure is bounded by its cap, not by the whole
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book. List MOR as a supported deposit and it becomes borrowable collateral.
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\vspace{0.35ex}
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\noindent\textbf{The outcome, quantified.}
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Take the \$20M of stETH already deposited \prov{verified} at a 50\% collateralization floor, standard
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for yield-bearing collateral \prov{illustrative}. That is about \$10M of spendable liquidity minted
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against deposits that produce \$0 spendable for the depositor today \prov{illustrative}, and the
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depositor keeps the staking yield and the MOR emissions. MOR gains its first non-speculative demand:
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listed at an initial cap of \$2M \prov{illustrative}, it moves from zero collateral use to
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borrowable, and the demand is sourced from lending rather than from the emission schedule. Yield
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diversifies from Aave-only near 5\% \prov{verified} across a dozen capped adapters, each classified
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and allocated under governance.
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\begin{stake}{What Morpheus gets}
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\item Its stETH becomes spendable without a sale, and MOR becomes borrowable collateral for the
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first time. Nothing in the Morpheus capital contracts has to change to list it.
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\item A worked, MIT-licensed engine whose yield is spread across a dozen capped adapters instead
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of one, so treasury income no longer rides a single counterparty.
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\end{stake}
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\noindent\textbf{Relevance, and first step.}
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One market on Lux lists stETH, self-repaying today, and MOR, borrowable today. \code{lux/liquid} is
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built and it is the lending leg of a set: it pairs with the bank that custodies the collateral
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(ADOPT-05) and the DEX that prices the synthetic and MOR against it (ADOPT-06). Lux is the
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counterparty that already runs all three, so the depositor never leaves one book to use the next.
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\vspace{0.35ex}
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\noindent\textbf{What this does not solve.}
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Self-repayment is a property of yield-bearing collateral. MOR listed as bare collateral is
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borrowable, but a MOR position only retires itself if MOR is put to work in a yield strategy of its
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own. The synthetic holds its peg through the redemption schedule and collateral quality, not by
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decree.
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\vspace{0.5ex}
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\noindent{\color{muted}\footnotesize\sffamily
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ADOPT-04, full paper available. \code{lux/liquid} \textbullet{} \code{VaultV2} and a dozen adapters.
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Morpheus citation checked against \code{SmartContracts/contracts/capital-protocol/DistributorV2.sol}.
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\quad\textbullet\quad \texttt{[email protected]}}
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\end{document}
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