Morpho Proposal Sparks Controversy Over On-Chain Vault Classification

Morpho's founder, Paul Frambot, has proposed categorizing on-chain vaults into two new regulatory categories: noncustodial and discretionary. This move aims to provide clarity for regulators in understanding the difference between these types of vaults.

Aave's founder, Stani Kulechov, responded by calling the proposal 'self-serving'. According to the critics, a timelock does not necessarily remove the manager's control over the funds. This raises questions about the actual impact of such categorization on the users and regulators alike.