CP134

cps/CP134/CP134.md

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+---
+cp: 134
+Title: CP134: Renewal RWA Lending Market Liquidity Bootstrap
+authors: GraysonAlto
+contributors: Imdior
+uses-component: cp2,cp4
+technical-proposal: no
+requires-onchain: yes
+impacts/modifies:
+status: rfc
+date-proposed: 2024-10-31
+date-ended: 
+---
+
+## Short Summary
+Extend incentive rewards program for the RWA Lending Market on Morpho
+
+## High level objective
+This proposal provides 90,000 CFG incentive rewards to be distributed as rewards for the RWA Lending Market. These rewards will last for 90 days on the LTF/verUSDC pair. 
+
+## Background
+The [CP103: Launch an RWA Lending Market](https://github.com/centrifuge/cps/blob/main/cps/CP103/CP103.md)  and [CP116: RWA Lending Market on Morpho](https://github.com/centrifuge/cps/blob/main/cps/CP103/CP103.md) were recently approved by the Centrifuge DAO.
+These two proposals had a strong positive impact on increasing the liquidity of the RWA Lending Market on Morpho.
+We believe that bootstrap liquidity plays a crucial role during the early stages and helps to attract new lenders in a competitive market, and allows us to consider new collateral assets to be included down the road. 
+
+## Description of Activity
+This proposal would cover three more months of the initiative, based on the planned amount of CFG to be supplied (1,000 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.
+
+
+![alt text](morphom.png)
+
+
+The LTF/verUSDC market has been very successful to date, attracting $3.21 million at it’s peak so far, and currently sits at $2.92 million. It’s important to continue to reward this market in the early days of its existence to grow its size, and eventually bring in more higher yielding collateral types. LTF is currently the 8th largest collateral on the Morpho deployment on Base, and has attracted mass media attention with its innovative use of Coinbase Verifications. 
+
+The market has been critical in delivering RWA yields to permissionless users in a indirect manner, especially as DeFi rates have been volatile and often below risk-free T-Bill yields. 
+
+## Change or improvement
+Initiate liquidity bootstrap and provide 90,000 CFG for 90 days once funds are received and deposit these rewards into the RWA Lending Market on the Morpho Rewards Distributor Contract [ 4e77t23oPrWXeNMFpjepPVP9anSwAu2CZuqh4SCve1spnTLK ].
+Distribute 1,000 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.
+
+Link to the RFC on the Forum:  
+
+Link to the onchain vote: