Due to the recent Morph Black whitelist activity, the discussion around Ethereum Layer 2 Morph has surged.
The narrative of consumer-grade public chains has become more concrete, with the launch of the official public chain U Card (a card using stablecoins and cryptocurrencies as payment methods, mainly Visa and Mastercard) combined with equity NFTs. However, this round has seen L2 shift from a top-tier narrative to a preferred short-sell target for bears. What is the narrative of Morph’s consumer public chain? Can it break the “L2 is dead” theory? This article will provide an in-depth analysis of Morph’s products.
What is a consumer-grade public chain?
According to reports, the first layer of Morph’s vision for a consumer-grade public chain is to transform DeFi, making it more accessible to ordinary users. The second layer focuses on on-chain application scenarios, aiming to bring everyday users onto the chain. The third layer is payment solutions, with Morph Black and Morph Pay being part of this, where the official public chain directly launches the U Card, linked to equity NFTs.
First Layer: Transforming DeFi
A more specific example provided in the news is Kaboom, a TG BOT. The TG BOT method, which is tied to social media, is generally easier for Web2 users to access on-chain transactions, similar to Sati on WhatsApp. However, many are creating TG BOTs. WHY Morph?
(Isn’t WhatsApp capable of cross-border transfers? Sati completed a $600,000 pre-seed round financing, with investors including Mexico’s third-richest person.)
On the other hand, if one doesn’t want to go the route of trading bots but rather learn the Mini App concept, Telegram has already closed this path, as it currently only supports the TON chain. If one truly wants to target social media, at least KAIA still has the advantages of LINE and KakaoTalk.
(Exclusive interview with Kaia public chain: Let’s reintroduce the new EVM-compatible public chain launched by Kakao and Line.)
However, there is a clever idea; the previously introduced Hana Network received investment from Morph. Hana Network is a lightweight financial interface that lowers the barrier to decentralized finance through an entertaining user interface. Although Hana Network currently operates the frontend for Hyperliquid, it may still support Morph.
(Public sales below VC valuations have become a trend; will the Hana Network incubated by Binance be the final piece for Hyperliquid to counterattack CEX?)
Second Layer: On-chain Application Scenarios
The news cites Impakt combining tokenomics with home fitness, but this case was already popular during the Stepn era and did not yield good results. So WHY Morph?
Third Layer: Payment Solutions
This may be the most worthy part to discuss; the current product line is Morph Pay, with the flagship product being the recently discussed U Card Morph Black. Max Resnick previously explained his perspective on the relationship between Ethereum’s mainnet and Layer 2, noting that transactions like buying coffee or small transfers can compress using Layer 2, but fundamentally Layer 1 should be where people transact. Morph’s idea of applying the chain as a payment method may be a good one.
(Ethereum developers discuss development dilemmas, revealing that Ethereum has deviated from the right track.)
Currently, Morph seems to be positioned similarly to Infini, allowing funds to be transferred to accounts with annualized returns. The official sources reveal annualized returns can be as high as 30%. Infini’s returns were mainly based on the Vault on Morpho, with quite transparent earnings. I am quite curious about the source of Morph Pay’s returns and whether it will follow Infini in establishing transparent revenue channels.
Based on past experience, Morph Pay can be initiated first, primarily offering users high annualized returns in the form of Morph tokens initially, which will decrease once the marketing budget runs out, essentially acting as a DeFi mining approach.
Morph Black Card Analysis
Currently, it appears to be collaborating with DCS Card Centre for card issuance, which is a compliant card issuer in Singapore. DCS’s D-Vault feature allows cardholders to enhance their credit limits or payment balances by recharging.
In simple terms, assuming your credit card limit is SGD 2,000, but you need to make a SGD 3,000 purchase. By depositing SGD 1,000 (cash/digital assets) into D-Vault, your available limit increases to SGD 3,000 (original limit 2,000 + recharge 1,000).
This method is similar to “prepaid” limits, but unlike debit cards, you can still use the credit features of the card (such as installment payments or points). In other words, in practice, it is more like determining the limit through financial proof rather than annual income/profession. However, the transaction record is still that of a credit card.
There is also speculation that Bitget has acquired a bank, thus enabling direct card issuance? Recently, there have been two financing news about U Card issuers that can be compared. Recently, Raincard secured $24.5 million in financing led by NorWest, with participation from Coinbase. Additionally, the well-known Redotpay raised $40 million in Series A financing. Further chain news will provide a U Card comparison.
Comparing Morph’s parent company Bitget Card, which is also positioned as a credit card but only for VIPs with a certain asset scale. Meanwhile, the Bitget Wallet Card is clearly positioned as a Debit Card. I speculate that Morph Black is likely positioned above Bitget Card and Bitget Wallet Card as a flagship card.
The various benefits released by Morph Black also remind one of the powerful card Cryptocom from the last cycle. The minting price of Morph Black is 0.2E, which is equivalent to Cryptocom’s red card. However, it offers additional benefits like Aspire VIP and expectations for ecosystem airdrops. Currently, Morph Black has ended its minting and can be purchased on OpenSea.
Comparison of Various U Card Data:
Transaction Fees:
- Bybit: 1%
- Bitget: 0.9%
- Redot: 1%
- Infini: 1%
Currency Exchange Fees:
- Bybit: 0.9%
- Bitget: Uncertain
- Redot: 1.2%
- Infini: 1~1.5%
Withdrawal Fees:
- Bybit: 2%
- Bitget: 2%
- Redot: 2%
ATM Withdrawal Limits:
- Bybit: $13,500 (per year)
- Bitget: $10,000 (per month)
- Redot: $200,000 (per month)
Currently, Morph has announced fees as low as 0.3% and a withdrawal limit of $1 million. If this comes true, it would likely be the strongest U Card currently available.
Can the Morph ecosystem succeed?
Morph is currently conducting point tasks. Cross-chain to Morph, spending gas on Morph, etc., can accumulate points. However, for some time, Morph’s actual transaction fees were tens of U, while the browser displayed only typical L2 transaction fees. Previously, KOL Icefrog also exposed that the official altered gas points.
On the other hand, out of the TVL of 77M, BulbaSwap accounts for 63M. Presently, one can gauge the Morph ecosystem largely through BulbaSwap, with investors including Foresight Ventures, MEXC Ventures, Kronos Research, and Morph itself, which should be quite clear. Yet, the entire chain’s DeFi protocol only generated a revenue of 1276U in transaction fees over 24 hours. It appears that on-chain transactions are not as active.
Combining Optimistic with ZK Consensus Mechanism?
In simple terms, normally, using Optimistic, if there is a dispute during the challenge period, a zk proof is generated. However, this is essentially the essence of Optimistic. Perhaps everyone no longer emphasizes what technology L2 uses, but in terms of transaction finality time, Optimistic requires days (until the challenge period ends), while zk proof time is comparatively shorter.
What is the positioning of the $MORPH token?
The most criticized aspect of Layer 2 public chain tokens is that the usage scenarios for governance tokens are too vague, with no real demand in sight. Currently, Morph’s mainnet has gone live and, like other Layer 2s, uses ETH as gas fees. Since the token has yet to be launched, but the mainnet is already operational, does this imply that Morph’s token positioning is similar to other Layer 2s, merely serving as a governance token?
On the other hand, Morph essentially represents Bitget and MEXC’s Layer 2 ambitions, which can be glimpsed from the launch of the Morph token on the two exchange tokens (these two tokens are only launched on Ethereum and Morph). Bitget strongly promotes BGB token empowerment, while MEXC has launched DEX+, both cases where CEX influence extends onto the chain.
(Key points from BGB token’s latest white paper: integrating PayFi, enhancing on-chain applications, burning 40% of circulation and maintaining continuous deflation.)
The question arises: how can a chain empower three main tokens (Morph, BGB, MX)? So what is the positioning of the Morph token?
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