Transitioning Morpho Arks/ Yield Sources from v1 to v2 on Ethereum Mainnet

Strategy & Research Protocol Strategy
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Morpho is incentviaing migration of capital from V1 to V2 vaults, and we need to keep up.

This proposal outlines the strategic replacement of underlying yield sources for the Lazy Summer Protocol from Morpho v1 to Morpho v2. By onboarding the latest version the Morpho protocol vaults, Lazy Summer aims to capture enhanced rewards, and ensure the protocol remains aligned with the most liquid and efficient yield sources in the ecosystem.

What is Morpho v2?

Morpho v2 is a significant upgrade to the Morpho protocol that introduces a modular, intent-based architecture designed to “future-proof” yield generation. Unlike v1, which was limited to specific markets, v2 vaults utilize an Adapter system. This allows vaults to allocate liquidity to any current or future Morpho protocol (including fixed-rate markets) without requiring complex migrations.

Motivation

The primary motivation for this transition is twofold: Yield Optimization and Ecosystem Alignment.

  1. Incentive Capture: Morpho has launched MIP-124, a specific incentive campaign designed to bootstrap v2 liquidity. By transitioning now, Lazy Summer Protocol users will benefit from these temporary but significant reward boosts that are not available on v1.
  2. Technological Superiority: As the DeFi ecosystem upgrades, liquidity naturally flows toward more efficient contracts. Morpho v2 offers superior gas efficiency and risk management tools that protect the protocol and its users.

For more details on the v2 incentives, see MIP-124 Vault v2 Incentive Campaign. For a technical deep dive, read Morpho v2: Liberating the Potential of Onchain Loans.

Specifications: Vault Categorization Overview

All proposed vaults are on Ethereum Mainnet. Due to the distinct risk profiles, specific technical onboarding details are separated into the following three attached RFCs.

Category 1: High Priority - Lower Risk, Known curators

Vaults utilizing high-quality collateral and established curators. These represent the “Blue Chip” yield sources for the protocol.

  • USDT: Steakhouse Prime Instant
  • USDC: Gauntlet USDC Prime, KPK USDC Prime v2, API3 Core USDC, Avantgarde USDC Conservative
  • WETH: Steakhouse Prime Instant, KPK ETH Prime v2

See attached RFC: High Priority Implementation Details

Category 2: Medium Priority - Higher Risk, Known curators

Vaults offering attractive yields with slightly higher risk profiles or newer track records.

  • USDT: Steakhouse High Yield Instant
  • USDC: Yearn OG USDC v2, Hyperithm USDC Midcurve

See attached RFC: Medium Priority Implementation Details

Category 3: Low Priority - Higher Risk, Unknown curators

Vaults designated for aggressive yield strategies or those requiring deeper risk assessment.

  • USDC: Gauntlet USDC Frontier, Hyperithm USDC Degen, August USDC v2, Clearstar USDC Core, Steakhouse High Yield Instant, Alpha Core v2

See attached RFC: Low Priority Implementation Details

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Lazy Summer Governance Recap [January 2026]
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thank you for bringing this up @samehueasyou, its important to recognize opportunities and make sure we are keeping up with integrated protocols and their developments

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I am supportive of transitioning the listed Morpho v1 ARKs to their v2 counterparts. In addition to the improved architecture of the v2 vaults, the v2 incentive campaign adds additional yield to upgraded ARKs through MORPHO token incentives.

The current APY of the MORPHO rewards is currently 2.04% for USDT vaults and 0.71% for USDC vaults. Since these rewards are captured and distributed as yield to depositors on SummerFi, transitioning these vaults is a no-brainer.

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[RFC] Onboarding Medium Priority Morpho v2 Vaults - Mainnet
[RFC] Onboarding High Priority Morpho v2 Vaults - Mainnet