Summary
This proposal seeks to allocate 5% of existing USP Holding incentives to support the newly launched USP/frxUSD market on Morpho. The objective is to strengthen liquidity, borrowing activity, and utility around USP within the Morpho lending ecosystem.
Rationale
This proposal allocates 5% of existing USP Holding incentives to the USP/frxUSD Morpho market in order to encourage productive usage and sustainable liquidity growth. The incentive allocation will be split as follows:
- 2.5% to users who supply frxUSD into the Alpha Frax USD Enhanced V2 Vault
- 2.5% to users who use USP as collateral and borrow frxUSD from the USP/frxUSD Morpho market
Rewarding users who borrow frxUSD against USP increases real utility and demand for USP beyond passive holding, while incentives for frxUSD suppliers help maintain healthy liquidity and market utilization.
This balanced incentive structure supports deeper capital efficiency and strengthens USP’s position within DeFi lending markets. By sourcing these incentives from the existing USP Holding incentive allocation, the proposal promotes ecosystem growth without increasing total emissions.
Morpho Frax USD Enhanced V2: https://app.morpho.org/ethereum/vault/0xd8CD72A2eB7A4312404C00AeD5172C0026da0C27/alpha-frax-usd-enhanced-v2
Morpho USP / frxUSD Market: https://app.morpho.org/ethereum/market/0x8f309d4b3066f80574810ed249472ba0ea1272e10834ae10dafa9f4f41aa63f4/usp-frxusd
Pre Proposal:
| Rate | Campaign Type | Distributed PIKU Amount Everyday |
|---|---|---|
| 60% | Holders of USP Token | 41,067.76 |
| 10% | Uniswap USP Pool Incentive | 6,844.63 |
| 10% | Curve frxUSD/USP Pool Incentive | 6,844.63 |
| 5% | Pendle LP USP | 3,422.31 |
| 5% | Pendle YT USP | 3,422.31 |
| 7.5% | Borrow USDC on USP/USDC 86% | 5,133.47 |
| 2.5% | Supply to Alpha USDC Forex V2 vault on Morpho on Ethereum | 1,711.16 |
Post Proposal:
| Rate | Campaign Type | Distributed PIKU Amount Everyday |
|---|---|---|
| 55% | Holders of USP Token | 37,645.45 |
| 10% | Uniswap USP Pool Incentive | 6,844.63 |
| 10% | Curve frxUSD/USP Pool Incentive | 6,844.63 |
| 5% | Pendle LP USP | 3,422.31 |
| 5% | Pendle YT USP | 3,422.31 |
| 7.5% | Borrow USDC on USP/USDC 86% | 5,133.47 |
| 2.5% | Supply to Alpha USDC Forex V2 vault on Morpho on Ethereum | 1,711.16 |
| 2.5% | Borrow frxUSD on USP/frxUSD | 1,711.16 |
| 2.5% | Supply to Alpha Frax USD Enhanced V2 Vault on Ethereum | 1,711.16 |