Reminder—It’s Morpheus Week!

If you haven’t set your reminders, don’t forget we’re doing two X spaces this week. Click the links below to set a reminder:

• Tuesday 4pm CT: Onchain Outpost <> Nounspace ft. Willy

• Wednesday 6pm CT: Onchain Outpost <> Morpheus ft. David Johnston

Market Metrics

Total Crypto Market Cap: up 0.7% to $2.57T
Total AI Sector Market Cap: down 0.8% to $30.2B

Top Movers (7 days):

📈Covalent Query Token (CQT): up 142.2% to $0.03402
📈AIT Protocol (AIT): up 40.9% to $0.1571
📈Numbers Protocol (NUM): up 29.4% to $0.05581

Daily News

🟠 Ora Protocol received retroactive funding from Optimism, with their onchain AI oracle now seeing over 3,800 requests on Optimism and related chains.

🟠 Data from Arkham Intelligence shows that BlackRock, Fidelity, Ark and VanEck are all aggressively buying BTC.

🟠 Zignaly announced the project’s roadmap moving forward. Key items include a tokenomics upgrade, pre-mainnet staking and whitepaper.

🔦 Morpheus—Revolutionizing Fair Launches

As we’re sure many of you have noticed, this cycle has been characterized by two distinct types of token launches:

1. Tokens launched with a low circulating supply and a crazy fully-diluted valuation—AKA “low float, high FDV” tokens.

2. Fair launch tokens with no private rounds or VCs and 100% of tokens circulating on launch—memecoins launched on Pump.fun are a good example of this.

While last cycle many people laughed about low float, high FDV tokens being “better” because the tokens were less liquid, this cycle has been a stark contrast. Market participants have become smarter and are staying away from most coins that fit this criteria so they can avoid becoming VC exit liquidity.

On the other hand, fairly launched tokens or tokens that are fully circulating have been receiving a lot of love. Memecoins and, more recently, OG DeFi protocols have all been getting love. While a rouge dev might dump his memecoin bag on you, at least you don’t have to compete with VCs looking to dump their tokens on you the moment they vest.

However, there is a reason why projects decide to go down the low float, high FDV route: Capital.

While a memecoin project can launch on pump.fun with nothing more than a few SOL and a dream, an actual project with utility or other functionality needs capital to cover operational expenses, pay wages, and market their product. Hopes and dreams do not pay the bills, and given the hyper-competitive landscape of crypto, the best projects need to pay top dollar to attract the best talent.

Of course, raising from VCs is not the only way to raise capital. Back in 2017 we were lucky enough to enjoy the “ICO boom” where projects raised capital by crowdfunding ETH and distributing tokens to those that contributed. However, this method came with its own problems and soon became a race to dump your tokens as soon as they launched.

So what other options are there for projects looking to launch their token fairly while still raising the capital and getting long-term buy in from particpants?

Well, we’re glad you asked. There’s a reason it’s Morpheus week!

What is Morpheus?

We’ve mentioned Morpheus in a few newsletters now, but if you missed them, here’s a quick primer:

Morpheus isn't just another blockchain project promising vague “decentralization of AI”. It's a network designed to power AI agents that can execute smart contracts on users' behalf. Imagine having your own AI assistant that can execute actions for you on-chain with the full context of your financial goals and personal situation – that's the vision Morpheus is building towards.

What sets Morpheus apart is its unwavering commitment to fairness and decentralization. There are no founders, no formal team, and no foundation. Instead, Morpheus is driven by a community of open-source contributors, all working towards a common goal: to provide users with a decentralized, permissionless personal AI.

MOR20: A New Standard for Fair Launches

At the heart of Morpheus lies the MOR20 platform, a groundbreaking approach to token launches that addresses the shortcomings of traditional models while providing projects with necessary capital.

How MOR20 Works:

1. A project sets up their smart contracts and token economics on the MOR20 platform.

2. The project opens a pool for stETH deposits from participants.

3. Deposited stETH generates yield (currently about 3.5% APR):

   • 3.15% goes to the project as Automated Recurring Revenue (ARR)

   • 0.35% supports the MOR20 platform

4. Project tokens are distributed fairly to depositors based on stETH deposits.

5. Participants can withdraw their stETH at any time, minimizing risk and allowing them to withdraw their support for the project if they don’t agree with the direction or simultaneously, add more capital if they wish to support it further.

6. In return, projects receive a steady stream of funding from the stETH yield.

For perspective, a project attracting 10,000 ETH in deposits would receive about 315 ETH (~$1M) worth of funding annually, providing substantial runway for growth while maintaining fair token distribution.

Key Benefits:

• Fair Launch: No pre-mine, private sales, or VC preferential treatment.

• Capital without Token Sales: Projects avoid undervaluing their tokens early on.

• Loyal, Low-Risk Participation: Supporters retain their principal investment and give up native ETH yield for tokens in the project they are choosing to support instead.

• Predictable Revenue: Projects have a stable income for long-term development.

• Simplicity: Any project can bootstrap with MOR20, even beyond crypto and AI.

• Network Effect: Access to the Morpheus community provides an instant user base. Morpheus raised over 100,000 ETH, proving the strength of the community.

This new model solves the capital dilemma that has plagued fair launches, allowing projects to compete with VC-backed ventures without compromising on decentralization. As the Morpheus ecosystem grows, so does the protocol liquidity, creating a virtuous cycle that benefits all participants.

MOR20 represents a significant leap forward in the maturation of the crypto ecosystem, aligning the interests of projects and their communities. As we move forward, projects launching through MOR20 will be worth watching closely – they're not just individual opportunities, but pioneers of a new paradigm in crypto project funding and growth.

Nounspace: Pioneering the MOR20 Fair Launch

Nounspace, a Web3 version of MySpace built on the Farcaster protocol, was the first project to use the MOR20 platform to raise capital and launch their own project. The project raised over $8 million in stETH in the first two days of launch, with participants earning $SPACE tokens in return for their yield.

These tokens will provide governance rights within the Nounspace ecosystem, allowing holders to shape the future of this innovative social media platform.

We’ve minted an nOG NFT to get access to the Nounspace platform and it is pretty neat!

You can mint a nOG here, which will give you lifetime access to Nounspace. Don’t forget, we’re speaking to Willy from Nounspace on Tuesday—set a reminder!

The Future of Fair Launches

We believe that MOR20 and similar models will become increasingly prevalent for several reasons:

• Alignment of Interests: By providing ongoing yield to projects without requiring token sales, MOR20 aligns the interests of projects and their communities from day one.

• Sustainable Funding: The ARR model ensures projects have a steady income stream, allowing for long-term planning and development without the pressure of token price volatility.

• Fair Price Discovery: With no artificial supply constraints or insider advantages, tokens launched through MOR20 are likely to find their true market value more quickly and sustainably.

• Genuine Support: The model discourages pure speculation and encourages genuine support for projects, potentially leading to healthier, more stable ecosystems.

• Broader Accessibility: By lowering the barriers to launch, MOR20 could usher in a new wave of innovation from developers and teams who previously lacked access to traditional funding routes.

As the crypto market matures, we expect to see a shift away from the "low float, high FDV" model that has dominated recent years. Investors are becoming more discerning, seeking projects with fair distributions and sustainable economics.

MOR20 and Morpheus are at the forefront of this shift, pioneering a model that could redefine what it means to launch a token fairly. While it's still early days, we're excited about the potential of this approach to foster a more equitable, sustainable, and innovative crypto ecosystem.

If you want to learn more about Morpheus, don’t forget we’re speaking to OG contributor David Johnston in a space about Morpheus later this week—set a reminder!

Meme of the Day

Pump.fun is the ONE TRUE source of news!