morpho

Thinking about the possibility of first loss capital staking on @morpho. Would allow curators to cater to multiple tiers of risk preference in the same vault. An implementation of this would be an interesting subject for a grant

Father, garden appreciator, Protocol Specialist @morpho

Idea for how it could work :

Create a “peg stability module” where vault shares could be used to mint or redeem a deposit receipt at a fixed exchange rate. Holders of the deposit receipt stake-lock for a bonus share of fees. Vault users can opt in to the insurance pool by minting the deposit receipt. New mints allowed only if no bad debt has been realized (vault share exchange rate has not been modified since insurance pool has been created). If vault takes bad debt, users who opted into insurance and aren’t staked-locked can redeem in the insurance pool.