MORPHO is the Morpho Protocol's governance token. The Morpho DAO — made up of MORPHO holders and delegators — governs the Morpho Protocol. The governance system uses a weighted voting system in which the number of MORPHO tokens held determines voting power.
MORPHO holders can vote on changes or improvements to the protocol, including:
- Future initiatives to grow the Morpho protocol
- Deployment and ownership of Morpho smart contracts
- Turning on/off the fee switch built into the Morpho smart contracts
- Govern the DAO Treasury.
The original, now legacy, MORPHO token was deployed as an immutable contract and lacked functionality associated with onchain vote accounting. The Morpho DAO voted to create a contract to wrap the legacy tokens into wrapped MORPHO to enable onchain vote tracking functionality in MIP-75.
In addition to onchain vote tracking, using an upgradeable token makes it possible to conform to a crosschain interoperability standard in the future, minimizing friction for MORPHO holders who want to move their tokens between chains.
Although legacy MORPHO tokens can be freely converted to wrapped MORPHO 1:1 via the wrapper contract, there could be a risk that legacy tokens might be used mistakenly in external integrations, such as exchanges. To prevent this, only the wrapped MORPHO will be transferable. Users can easily wrap their existing legacy MORPHO tokens on the Morpho App.
