Morpho-Aave Yield Tranches decommission


A proposal to decommission the Morpho-Aave Yield Tranches DAI, USDC, USDT and WETH pools on mainnet.



Idle DAO recently voted to decommission the Junior Best Yield vaults on the DAI, USDC, USDT and WETH markets. This decision was driven by multiple reasons such as the low profit margin and traction achieved in the market

Other than the Clearpool Yield Tranches, the Morpho-Aave tranches were part of the underlying yield sources of the Junior BY vaults.

As a direct consequence, now missing the Best Yield showcase, it is time to discuss the future of the Morpho Aave pools.

Since January 2023*, the Morpho-Aave tranches have shown the following metrics on Ethereum

Yield Tranche Average TVL Average APY
YTs DAI Senior $2,019 1.92%
YTs USDC Senior $2,287 4.21%
YTs USDT Senior $2,535 2.80%
YTs WETH Senior $3,021 1.30%
YTs DAI Junior $5,541 5.53%
YTs USDC Junior $4,782 12.41%
YTs USDT Junior $3,722 9.07%
YTs WETH Junior $8,588 3.31%

The Morpho tranches showed a very low level of liquidity partially driven by the yields offered and also due to the low perceived risk.

Fee-wise, the Morpho-Aave tranches did not generate any significant fee in the face of $1,000 spent for harvest. If we add to the equation, the costs of the security monitoring tools and maintenance, all the vaults would show a negative profit margin.

* The Morho Aave tranches were launched on January 30th, 2023.


Given the low liquidity and fees generated by the Morpho Aave tranches and the recent closure of the Junior BY vaults, we suggest decommissioning the DAI, USDC, USDT and WETH Morpho pools.

This action will decrease the monitoring and updating effort of the Development League and also reduce the cost incurred by the DAO to pay for the harvesting activities.

These four vaults will be first flagged as sunsetting, then moved to the Decommissioned assets section of our dashboard and deposits will no longer be available. We will communicate the wind-down both in our dashboard and in our communication channels.

After a couple of weeks, and when possibly empty, the pools will be delisted from the main UI under Yield Tranches. Users will still be able to redeem their funds from either the beta version of our dashboard or by interacting with the contracts on Etherscan.

Together with the Morpho-Aave delisting, we also advise delisting the Senior BY WETH vault. The vault has low liquidity and currently supports only the Aave and Compound markets. After its delisting, we will relaunch the pool with an improved codebase and new yield sources.

Next steps

This proposal does not want to stop the fruitful partnership with Morpho, but instead make Idle’s offering more competitive from a yield perspective and efficient from a cost-return point of view.

This is proven by the recently launched pools on top of the MetaMorpho vault based on Morpho Blue:

  • WETH YTs managed by Block Analitica and B Protocol
  • USDC YTs managed by Steakhouse
  • WETH YTs managed by Re7 Capital (TBA)

These new MetaMorpho Yield Tranches are good candidates to become new underlying markets for the forthcoming thematic Best Yield, conditional on the DAO’s approval.

This post will be open for discussion, and in about 72 hours, if there are no objections, we will proceed with the Temperature Check.


Temperature check voting

The voting phase to approve the Morpho-Aave tranches decomission starts now :ballot_box:

  • For - Agree with the Morpho-Aave YTs wind down on the DAI, USDC, USDT and WETH markets. Agree with the Junior BY WETH vault decomission
  • Against - Disagree with the Morpho-Aave YTs wind down on the DAI, USDC, USDT and WETH markets. Disagree with the Junior BY WETH vault decomission.
  • Discuss more - Discuss more the Morpho-Aave and Junior BY pools decomission

:arrow_right: Poll for $IDLE holders: HERE
:arrow_right: Poll for $IDLE stakers (stkIDLE holders): HERE

:alarm_clock: Polls will close on 2024-02-29T16:30:00Z

The final $IDLE voting weights will be calculated using the approved calculator.

Looking to delegate your vote on Snapshot? Follow the official Snapshot guide.

Let your vote count! :writing_hand:

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Temperature check results

Temperature Check passed :white_check_mark:

The Morpho-Aave tranches and the Junior BY WETH vault will be delisted. The strategies will be available at first in withdrawal-only mode and later decommissioned. Liquidity providers are invited to redeem their deposits at the earliest opportunity.

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