Morpho reveals challenges in protocol risk curation business model
Summary
The recent analysis highlights the challenges faced by DeFi curators, particularly regarding their financial sustainability and reliance on distributor agreements. Despite attempting to integrate 11 live distributors last week, it appears that many curator businesses are not yet self-sustaining from vault fees alone. For instance, one retail integration charges no fees at all, leading the protocol to subsidize a 7% target yield to maintain its shelf space. Furthermore, the distribution agreements often dictate crucial revenue-sharing models, with one integration taking 25% of annual percentage yield, split among various stakeholders, significantly limiting the curators' earnings. Such dynamics underscore the reliance of curators on offchain fee splits and custom arrangements to ensure viability.
Analysis
Categories
Related sources
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