Source: Morpheus

Project Name: Morpheus

Project Type: Intelligent Agent - Artificial Intelligence (AI)

Token Symbol: $MOR

Cryptocurrency Ranking: N/A

Market Cap: N/A

Fully Diluted Valuation (FDV): N/A

Circulating Supply: N/A

Maximum Supply: 42 million

Preface

Greythorn recently analyzed several AI projects, emphasizing the significant impact of artificial intelligence in the coming years, which is worth paying attention to. At the same time, Greythorn found that there is an increasing demand in the market for large-scale open-source language models (LLMs). It is worth noting that these LLMs often lack basic features such as user-friendly interfaces and effective management of user data. To address these issues, the intelligent agent protocol was introduced. It facilitates the management of local LLMs through Web3 wallets, enhancing user experience and control.

As the AI market prepares for substantial growth, many key players predict that AI will play a crucial role in the mainstream adoption of cryptocurrencies. Morpheus, with its innovative AI agent network, challenges the centralized AI field and offers a transparent and fair launch strategy, making it a key project in the future AI landscape.

Project Overview

MorpheusAI represents a significant advancement in combining AI with blockchain, especially for Web3. It goes beyond traditional smart contracts (which are reactive) by using AI Agents for proactive, real-time decision-making, benefiting from the progress of large language models (LLMs) that transition AI's analytical capabilities to the efficiency and security of blockchain.

MorpheusAI not only enhances various fields such as service markets and crypto games by enabling complex AI-driven tasks, but also seamlessly integrates with Web3 technology. It provides APIs, decentralized cloud services, and easy integration with crypto tools and DApps, aiming to make personal AI agents or intelligent agents widely available. These intelligent agents can interact with users' wallets, DApps, and smart contracts, bridging the gap between traditional and blockchain technologies.

By allowing natural language communication with intelligent agents and proposing a network supported by a token system to incentivize development and usage, MorpheusAI provides a user-friendly and innovative approach to AI in blockchain. It stands firm as an open-source alternative in a field dominated by closed-source models, providing a secure, efficient solution that enhances the blockchain ecosystem for developers and users.

Key Attributes of Morpheus

• Web3 Integration: Morpheus is inherently native to Web3, enabling users to engage in cryptocurrency transactions, use smart contracts, access DApps, and DeFi services, surpassing the capabilities of current LLMs that lack direct Web3 connectivity.
• Decentralization and Cost Efficiency: By operating on decentralized public infrastructure, Morpheus avoids the regulatory and cost barriers faced by centralized entities, providing a more affordable and flexible solution for AI deployment and usage.
• Developer-Friendly Platform: Morpheus offers an alternative to developers similar to Linux, facilitating the rapid creation of new agents or LLMs without incurring costs, while ensuring data ownership and security.
• Innovative Reward System: The platform incentivizes contributions from various roles, including capital providers, coders, computing providers, and community builders, through a token-based system, rewarding participation and contributions to the Morpheus ecosystem.

Morpheus Path

• Capital Proof and Rewards
• Capital providers generate income by providing stETH support to the network and contribute to the Proof of Liquidity (PoL) owned by the protocol. This mechanism ensures liquidity of the ecosystem, rewards capital providers with $MOR tokens in proportion to their contributions.
• Code Proof, Registration, and Rewards
• Developers contribute code to the Morpheus network and receive rewards based on the value of their contributions. This system encourages the development of specialized agents and tools, enhancing the platform's capabilities and user experience.
• Computing Proof and Rewards

Computing providers offer resources required by AI models and receive compensation rewards based on demand. This approach ensures efficient resource utilization and rewards providers for their contributions to network computing needs.

Source: Morpheus

• Community Builder Proof, Registration, and Rewards

Community builders develop and provide user interfaces and developer tools, promoting interaction with the Morpheus API. They receive rewards based on the fees generated by their contributions, fostering the development of a vibrant and supportive ecosystem.

Source: Morpheus

Morpheus Technology

• Technology Stack and Smart Contract Development: Morpheus utilizes the Ethereum blockchain and its ERC20 standard for the MOR token, with plans to expand to other Ethereum Layer 2 solutions and compatible blockchains for broader adoption and functionality. User Data Security: Prioritizing data security, Morpheus plans to adopt Fully Homomorphic Encryption (FHE) technology to provide enhanced user data protection for LLMs, ensuring security within the peer-to-peer network.
• Guided Growth of the Network: The guided period will facilitate the initial distribution of MOR tokens, ensuring a balanced and fair starting point for the network. This stage is crucial for establishing stable foundations for Morpheus' growth and utility.

Token Economics

Allocation and Rewards

• Daily Allocation: $MOR tokens are allocated daily, with the community (builders and creators driving user engagement and growth, development tools, and front-end) accounting for 24%, and capital providers, computing resources providers, and coders each accounting for 24%, with an additional 4% reserved as a protection fund.
• Total Supply: The upper limit for $MOR tokens is set at 42 million, with no pre-mining or early token sales, ensuring a fair launch, which has already passed on February 8th.
• Block Rewards: Starting from 14,400 $MOR per day, the rewards decrease daily until reaching zero on the 5,833rd day, transitioning the incentive model from block rewards to transaction fees.

Source: Morpheus

Utility of the MOR Token

$MOR serves as the on-chain mechanism to facilitate transactions within the Morpheus network, such as:

• Developers paying fees to computing providers for API calls. Transactions are specific to agents created by developers. Rewards for users providing training data for new LLM/agents.

Token Allocation Phases

Early Stage: Launch Phase

• Capital Providers: Receive $MOR based on their stETH contributions.
• Computing Providers: Compensated with $MOR for processing user prompts.
• Coders: Rewarded with $MOR for contributions to Morpheus software.
• Community Builders: Earn $MOR for involvement in front-end, tools, and value-added services.

Mid-term: Broader Circulation

• Block rewards and transaction fees balance across all roles.

Long-term: Deep Liquidity

• Transaction fees become the primary incentive mechanism in the ecosystem.

Tail Emission Strategy

To ensure long-term sustainability and consistent incentives, Morpheus adopts a "tail emission" strategy:

• Post block rewards: After the initial allocation period, 50% of burned $MOR tokens ensure continuous rewards. Tail emission of $MOR will commence after the final $MOR token issuance on day 5833 of the allocation schedule (approximately 16 years).
• Circulating cap: Tail emission is capped at 16% of tokens in circulation, maintaining the scarcity and value of $MOR.

By ensuring that tail emission is only a portion of burned tokens, the total circulating supply of MOR will not exceed the hard cap of 42 million. In fact, as some tokens are burned and only partially replaced, the total supply of MOR may become increasingly scarce over time. This approach allows for a balance between incentivizing participants and ensuring the scarcity of MOR tokens within the Morpheus ecosystem.

The chart below shows the available $MOR tokens over time, from day 5833 to year 256, assuming an average of 25% of $MOR tokens are burned or "burned" during this period.

Source: Morpheus

Competitive Analysis

Olas (formerly known as Autonolas) is a frontrunner in the AI intelligent agent space and is considered one of Morpheus' main competitors. We have extensively discussed Autonolas and compared it to Morpheus and Fetch.ai, so I'll provide a brief overview here. Autonolas stands out for its operation across multiple blockchain platforms, increasing its adaptability and wider adoption. It is specifically designed to create and deploy autonomous agents for developers, dApps, and users, emphasizing shared governance and ownership.

On the other hand, Morpheus focuses on making AI and computing capabilities widely accessible, akin to personal computers and smartphones. It emphasizes empowering individuals to own and use AI agents and computing resources, transcending AI to encompass a broader range of computing capabilities.

While these two projects compete for market share, they actually have complementary objectives. Autonolas focuses on governance of autonomous agents across different blockchains, while Morpheus focuses on providing access to AI and computing resources for individuals. This focus difference suggests potential mutual interests and opportunities for collaboration between the two.

Overall, Autonolas provides a blockchain-agnostic platform for governance and shared ownership of autonomous agents, while Morpheus aims to directly deliver AI and computing capabilities to users.

Bullish Fundamentals

• Since its debut, 1% of Lido stETH has been staked in the Morpheus Capital Provider Smart Contract, reaching 99,717 stETH in just 20 days.
• MorpheusAI has introduced a new reward mechanism, actively rewarding various contributors with $MOR tokens, fostering a collaborative and incentivized ecosystem.
• The rapid advancement of AI technology is leading to an increasing adoption of AI agents replacing human labor across various domains. The CEO of Anomica Brands predicts that 70-80% of transactions will soon be conducted through autonomous AI agents, signaling a transformative shift in transaction methods.
• The DeAI space has gained significant popularity, especially after the launch of ChatGPT, ranking first in departmental search traffic in CoinGecko's 2023 report, despite its small share in the overall cryptocurrency market cap, indicating growing interest.
• As the founder of MorpheusAI, David Johnston has been at the forefront of decentralized technology, introducing "Dapps" in 2013 and later "Smart Agents" in 2023.
• MorpheusAI actively participates in significant events, such as the 2023 Decentralized AI Summit, demonstrating its commitment to leading and shaping discussions in the decentralized AI space.
• With its unique features such as Techno Capital Machine (TCM) and the commitment to fair launch, MorpheusAI is making a significant impact in the agent space.
• Considering the valuation of similar agent projects, such as OLAS ($3.5 billion FDV) and FET ($1.5 billion FDV), MorpheusAI demonstrates tremendous growth potential, supported by a large total addressable market (TAM).

Bearish Fundamentals

• Like any project utilizing blockchain and AI, Morpheus is susceptible to security risks, including smart contract vulnerabilities and potential manipulation of AI models. Any significant security vulnerabilities could severely impact trust and user adoption.
• The success of Morpheus also depends on its ability to provide a user-friendly experience. The technical complexity of managing AI agents and blockchain operations may hinder non-technical users, limiting its adoption.
• Bearish market conditions or a loss of confidence in crypto assets by investors could indirectly impact the project's performance.
• Morpheus' economic model, including its token economics and incentive structure, needs to prove sustainable in the long term. Any design flaws could lead to issues with liquidity, token value stability, and overall project sustainability.
• Convincing users to transition from traditional AI platforms and services to decentralized models may pose a challenge.
• The practical implementation of its vision faces significant technical barriers, including scalability, interoperability between different blockchains, and ensuring the effectiveness and security of AI models.

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