[ARFC] Merit - A New Aave-Alignment User Reward System

Morpho optimizers are a leech on top of the Aave protocol that provides zero benefits and steals potential revenue at the scale of millions per year for negligible yield improvement of users, subsidized by the fact they take zero revenue for doing this.

Merit helps to put an end to this. With the ACI, we are completely clear about our position on optimizers; every morpho optimizer user hurts by proxy the Aave protocol revenue. Therefore, they get a non-aligned status and are zeroed out of the merit system.

Spark & Morpho Blue are just Aave competitors; it’s a normal incentive campaign to apply a boost to users willing to discover the alternatives. Under the Merit system users using Aave & alternatives are not zero’ed out. they will receive merit rewards based on the aave side of their activity.

The whole merit system is an additional rewards system on top of Aave protocol regular yield.
Aave is and will stay a permissionless, neutral & decentralized protocol.
The Aave DAO is free to distribute additional rewards on top as they see fit.

Well, if Phoenix Labs wants to be seen as an entity with no weight of its word, that seems an interesting pathway.

A young company doesn’t have a lot of shots to build a reputation.
The current deal is mutually beneficial, and despite what some may believe, at the ACI, we still strongly believe there are a lot of potential future synergies between the Aave & Spark/MakerDAO ecosystems.