I see. Yes that's a tricky situation. Currently there is no way to have those three things at the same time: instancing, per-instance materials and per-instance mesh deformation motion blur.
The only workaround I can think of at the moment, which would not require you to redesign all of your proxies to use the same material, would be to render your instances with material overrides and no motion blur (render as instances), and then render as meshes (without motion blur again) and export a vray velocity pass from your render elements for those meshes. The motion blur would then be something computed in your comp as a post effect.
The only workaround I can think of at the moment, which would not require you to redesign all of your proxies to use the same material, would be to render your instances with material overrides and no motion blur (render as instances), and then render as meshes (without motion blur again) and export a vray velocity pass from your render elements for those meshes. The motion blur would then be something computed in your comp as a post effect.