Welcome to the accelerationist era. Get good and get friendly, or get fried. Morpheus, god of sleep in the greco-roman canon, the wiggy black guy in The Matrix with a handful of pills, and the frontier for AI agents. Take your pick.

Morpheus is a protocol for dreamers and comes with a healthy serving of nostalgia. It reminds me of the old days when crypto truly had its eye on changing the world and was going to blow a hole in the financial landscape and replace it with something better, something more egalitarian. This spirit lives on, and decentralized AI models are the next battleground.

Cypherpunks, accelerationists, and dreamers, thank your gods and pray for strength, for you have another war to fight. Introducing Morpheus, the coordination and incentives layer for decentralized AI. Here is Pango’s bullish take on the future and why projects like Morpheus are carrying the torch for the next generation of crypto.

Freedom lovers & accelerationists unite

Artificial Intelligence is the next dangerous thing that humans have gotten their hands on and the cat is well and truly out of the box. To quote Vorhees, ‘‘Of course anything interesting the government wants to get its hands on, and I started seeing the trajectory of large language model inference being pulled into the gravitational well of regulations.’’ Reading between the lines: AI and the proprietary of AI will be extremely important in the coming years.

Morpheus is a stand against the tremendous pull of government and the gradual (yet devilishly persistent) erosion of our rights as human beings. It seeks to guarantee each person an personal AI agent that safeguards their data and crucially is not owned by a corporation.

Put your thinking hat on for one second. How much data do you think your phone hoovers up? This all feeds algorithms somewhere on a centralized server. Moving forward into the AI future. How well do you think these models will start to understand you? Do you want this data leveraged against you? The unseen lines are growing sharper, my friend. And for that reason, Morpheus exists.

Not to forget all the capitalists and degens out there. The only three sectors enjoying any traction this cycle have been RWAs, AI tokens, and memes. $MOR has genuine promise as an AI altcoin, not to mention longing decent AI tokens in the runup to Nvidia’s next earning report 22/5 is free fucking money, eh. That is what I like about Morpheus; it is a purist ideological project (capitalismo included) and shines from all directions.

What will the product look like?

What does the end user get out of Morpheus? Task-specific AIs that promise to unleash the next wave of market participation. Morpheus is where you access intents-based AI agents that will perform any task you desire (if everything goes well) and send a transaction request that you confirm.

In simple terms, Morpheus is a platform specializing in building (technically, “incentivizing”) and deploying permissionless smart agents. It gives cash rewards to compute providers and the devs spinning up agents and allows users to access these AI agents through web interfaces (or alternatively, they can download the Morpheus full node.) The final goal is AI agents that respond to natural language requests. Morpheus has beaten in a good streak of capitalism rewarding based on usage following Vorhees’ Yellowstone Paper.

‘Deploy $500 in the highest yielding liquidity pool with a low risk of suffering serious impermanent loss.’

The AI agent gronks about, does some magic, and then spits out a transaction at you. You confirm it. And voila. It is done. The above example is relatively complex, and at first, commands will be more akin to "swap token X to token Y & stake my ETH." The agent will find the optimized routes based on your pre-set preferences.

LLMs (Large Language Models) are generalized pieces of kit that gather and provide general answers. But AI agents will be task-specific tools that take action. These little devils are trained on smart contracts, knowing all of the ins and outs of DeFi applications, and can cater to your every whim. Think of them as your personal butlers.

Morpheus envisions thousands of AI agents serving all imaginable use cases, and this is the innovation. The Morpheus fellas are separating the operating and application layers. Start your engines, scrub your glasses, and get ready for the Cambrian explosion of AI agents. Most of the initial products will be wrappers on existing dApps, but when devs get good limits disintegrate like cheap gas station toilet paper and anything is possible. Until now, AI tools have heavily skewed towards offering information. Agents will skew towards taking action.

This is the stack. Users run a full node and use the Morpheus wallet or alternatively collect their existing smart wallet locally. The Morpheus network is blockchain agnostic, and all economic tangents occur on-chain (staking on Ethereum and token minting on Arbitrum.) Most users will interact through Morpheus via web interfaces and applications. It will be an open-air marketplace to access AI agents already connected to all the capital, connections, and compute they need. Connect your wallet, interact with a chat interface, and let Morpheus take care of the rest. The future is going to be wild bruv.

A new-fangled AI token: Who cares?

1. Markets have shown their hand and are favorable to AI projects across the board- crypto and TradFi.
2. Radical builders clubbing together to preserve freedom often leads to wealth creation for early users.
3. AI is the coolest thing we as a species have built in recent memory.

Put all three together. Sprinkle a good dash of crypto-economics into the mix and a global talent pool, and shit gets wicked cool fast. These are the background premises of why you should be paying attention to Morpheus bucko. Clean those ears; we are diving in cock first.  

Morpheus lore

Morpheus is a collection of open-source contributors building decentralized AI. Their higher purpose is connecting Web3 and AI. They are building the rails and the Morpheus network, continuing to run with the marketplace analogy, can be fairly likened to an app store for AI agents. It will be chomping all of the resources provided by the current AI infra providers. AI models from Bittensor, decentralized compute from Akash/IO, and the rest of the buggers. Morpheus is gobbling all this output up and ensuring that the most useful tools get the largest slice of the pie. Note ecosystem harmony and the provision of demand.

It is a collection of over 200 developers, many anon, working together to put two fingers up to centralized AI providers and guarantee you freedom of access to a non-corporate-owned AI. Broski. You gotta love people like this. Shout out nerds with principles worldwide. These genuinely are the revolutionaries of our era. Morpheus has no head to kill. There is no organization, no team, nothing to aim at. Just a bunch of developers all over the world who can and, unfortunately, probably will have to move from jurisdiction to jurisdiction depending on who plays nice with AI. This point being the same for all AI infra providers/ dabblers. Does it sound similar to node operators running the Bitcoin or Ethereum network yet? It should.  

One of the more wishy-washy yogurt-weaving and wig-wam-eating reasons to be bullish on Morpheus is the lore and the lore alone. Open-source code contributors coming together to build permissionless networks that challenge the current status quo is the second coming of early-stage crypto development. Nobody even knows the true authors of the paper. True lore.

Ze bootstrap

Morpheus enjoys another novel piece of lore, and this originates from its fair launch mechanism. The initial run of $MOR tokens were allocated to capital providers over a period of 90 days in order to avoid a Zcash situation of early price spikes due to low circulation. Hats off and foreheads touched, Morpheus accrued over 100,000 stETH without any paid advertising, a foundation, or PR. It started on February 8th and has come to its dramatic denouement. The genius behind this fair launch is that the principal is protected, and all liquidity providers lose out on are stETH yields.

Anybody contributing forgoes their usual staking rewards to earn $MOR tokens, and this capital contract peels off all those juicy daily rebases to create liquidity for the $MOR token.

The lock-up period was seven days, and it has been, by any objective measure, a booming success. You have to admit it is a slick way to get liquid. If you’ve got heavy bags of $ETH you get to take a punt at a new token with literal minimum opportunity cost. And Pango is a full supporter of this method being implemented more broadly- de-risk the start-up period and bring back ICO buy pressure for $ETH.

To be a naysayer, one could angle that attracting bucketloads of stETH is not that impressive because every man and his dog who made a buck last cycle is drowning in the stuff and looking to bleed any juice they can out of it. Like I said in the INJ ecosystem report, Liquid Staking Tokens (LSTs) boast the best product-market fit of any DeFi primitive and Morpheus has introduced an absolute ripper method for leveraging stETH. Users deposited on Ethereum and $MOR tokens will be claimable on Arbitrum- big kudos for plugging the little guy in and making trading the tokens cheap and accessible.

$MOR tokenomics

Getting the numbers out of the way quickly.

- Total Supply: 42,000,000

- 16-year emissions curve with a daily incremental decay rate

- Burn implemented via optional inclusion (user community and code/ AI can burn fees if desired)

The giga-brains at Morpheus have a plan for the next 256 years via recycling burned tokens as tail emissions to get their arm around the block rewards stopping debate before it even begins. GG lads.

Understanding  the stakeholders

There are four shareholder groups earning an equal share of $MOR emissions:

Community - builders creating frontends and tooling to attract users

Capital - liquidity for funding compute and code

Compute - providing the horsepower

Coders - the wizards putting the above three together into products

$MOR is your key to the world of decentralized AI and allows you to access the network. In the words of David A. Johnston ‘‘anybody holding $MOR has a pro-rata right to the inference, to the compute for the AI models on the network.’’ And this summarizes it nicely.

Your $MOR balance is your allocation of resources. More $MOR tokens in your wallet entitles you to more inference, and if you want more access you are strong-armed into buying more $MOR. (Well-played). This pro-rata ownership right sidesteps piecemeal payment per interaction, and access is basically free for token holders. Removing niggles like paying per inference is bullish. Staking also comes into play, and users can direct their staking rewards toward projects they want to support. Everything is finetuned, and the most bullish underlying concept is the pure capitalismo spirit. Allow free markets to do their thing and drive progress. Morpheus directs value to demand, ensuring the growth of the strong and the culling of the weak.

Abstract high level

Morpheus is an incentives and coordination layer, putting a line in the sand and creating a cabal of decentralized service providers to guarantee free access to decentralized AI tooling. They are in a rush to do this before governments close the book, and we all suck on the mighty tit of Sam Altman and OpenAI. One thing that heavily bleeds through Morpheus is a sense of urgency- you want to lock in decentralized AI now while it is possible the ladder has not been pulled up. Shout out Zuck and Llama3.

‘‘What Ethereum is to smart contracts, Morpheus is to smart agents.’’

David A. Johnston This quote perfectly summarizes the Morpheus project. Ethereum is a general-purpose and unopinionated network. Any Tom, Dick, or Harry can upload a smart contract that fulfills essentially any task. That is what makes Ethereum great. Morpheus delivers the same value proposition except for smart agents.

Morpheus aims to become the unifying layer for the fragmented world of decentralized AI infra, products, and services. The driving aim is to enable AI tech to meet consumer needs, and Morpheus is decoupling the application layer from the hardware layer, allowing each to evolve at its own pace. And here, you can already see the fledgling curve of a flywheel establishing.

More juice (compute) creates a deeper pool for applications to draw on, and then applications can better serve users, which encourages more providers to enter the network. Morpheus is plugging the demand side into the supply side. And unopinionated multi-sided marketplaces, which enable direct economic interaction between various types of agents have scary growth potential. (Please tell me you are seeing the parallel with Ethereum at this point → ETH is to smart contracts as MOR is to smart agents). For all ze left curvers (myself included), Morpheus is the organization wizard, bridging participants on all sides of the market.

Fleshing out the term “unopinionated” - it is exactly what it says on the tin. An unopinionated network is just cranking leverage up to max on users’ freedom to use/build whatever they want. Take the human capital lever and send it to infinity.

Get bullish on intent-based frameworks

Do not fade intent-based architecture or operation. Google cracked open the internet for the world through its search engine, which allowed natural language prompts. Intent-based tooling is based and bullish.

Accept the truth. Crypto markets are concurrently the most efficient and least intuitive markets in the world. Excluding telegram chats with Ethiopian diamond miners, but at that stage, you’re into some heavy business.

AI agents will decrease the lag between idea and execution, abstracting all the processes in the middle away (eventually). Decreasing the time between idea and execution is how you win more. It will supercharge volume and allow ‘free participation’ in markets. You do not need to know anything technical; only have an idea. DeFi’s main output is yield. Imagine how easy it will be to walk another generation of users on-chain when they can write an instruction like ‘find me a safe stablecoin yield.’ Ondo has been shoveling treasuries on-chain, and an AI agent will deposit the user's funds there. They get a better yield than a bank account, are exposed to arguably less risk, and don’t need to understand anything happening under the hood.

But it plays to the other side just as strongly. Lag time decreases. Imagine it. Night falls like velvet over the city. You have a twenty-pack of Marlboro golds. Acrid smoke curls up from your lips; you feel the ache in your jaw. The world goes silent. All that exists is a wallet loaded with 5 $SOL and that dog in you. Natural language prompts make every idea actionable as soon as it flickers through your mind. Plugging in has taken on a whole new meaning.

Bear case

Memecoins will likely steamroll $MOR performance, and everybody knows that in the current meta, utility is bearish. The token incentive model and reliance on emissions and “burned” rewards that become long-tail emissions is a little suspect. AI compute is demanding, hence why centralized providers have pulled ahead. It requires high-quality hardware, and the experience will likely be subpar, relying on decentralized service providers. Not to mention that the regulatory hammer will probably come down hard upon Morpheus.

Basic math dictates that with 5,495 depositors and 124,071 stETH deposited, the average deposit per wallet is 22.57 stETH (valued at $69,475 at the current price.) This ain’t exactly chump change. Rich Ethereum whales ready to rain down sell orders on poor layer two spot buyers? Could be baby- remember the most entertaining outcome is the most likely.

Privacy is another massive risk, and Morpehus is going head to head with serious incumbents (OpenAI, Google, and Microsoft). Also, never forget the customer. Regular people don’t give a shit if the service they are using is decentralized. Hell, most people in crypto don’t care about decentralization. Your average user is not going to stop using ChatGPT for a more freedom-flavored model. Morpheus’ explicit focus on the demand side makes this problematic if they cannot attract users. No users, no demand for $MOR, and the whole thing collapses like a drunken midget with osteoporosis after one too many shandies.

Bull case

Understand and internalize the concept of incentives, and the crypto landscape becomes clear. Tokens and financial incentives immediately establish a fair market value for any task and allow direct value accrual for value providers. Morpheus tempts global intellectual capital with financial rewards. Do you think there is more intellectual capital and compute in one company or in the world? Place your bet accordingly.

Morpheus leverages crypto’s existing wallet infrastructure, payment rails, dApps, and enormous computing networks right out of the gate. Open-source wins the long race because of incentives and $MOR is the engine oil making the decentralized AI machine sing. Even as a hedge, you want exposure.

Ze Pango play

Pango is stressed because he did not participate in the fair launch as he refuses to pay the gas fees on Ethereum layer one. As alluded to in the beginning, longing AI tokens into the Nvidia earnings report is easy money, and I will purchase a bag at launch.

I think it runs, and it will be an honor to allocate productive capital to a branch of crypto’s future and the spirit of times long gone. Buying $MOR is about sending a message. Crypto needs another growth narrative to funnel stupid amounts of money into the space, a principles backbone that has been missing as of late, and a new generation of dreamers for the next mindshare expansion. AI and Web3 could be that ticket.

I love senselessly longing animal tickers as much as the next man. I will long $MOR and contribute capital to a productive end to guarantee the next generation's right to senselessly long animal tickers.