Compound Digest - June 17, 2021
|Nick Martitsch||Jun 17|
Compound Grants is sponsoring the upcoming HackMoney hackathon, which will run from June 18th to July 9th. This event will bring together 1,000+ builders and designers to create innovative new financial products, learn from some of the sharpest minds in DeFi, and compete for $150k in various prizes.
If you’re looking for inspiration and/or guidance on what to build, Adam Bavosa hosted a workshop for Building on the Compound Protocol on June 15th, which you can watch a recording of here. We look forward to seeing the innovative projects and products launched during the hackathon!
Pendle Launches on Mainnet
Pendle, a protocol for hedging future yield, officially went live on June 17th. At launch, Pendle will support cDAI powered by Compound and aUSDC powered by Aave. Users can supply cDAI and aUSDC to Pendle’s protocol, in exchange for ownership tokens (OT) and future yield tokens (YT). By separating the yield and ownership characteristics of cTokens, traders can express their views on the future increase or decrease of interest rates in a more capital-efficient manner than having to purchase the underlying asset. For a deeper explanation of Pendle and a list of use cases, check out their documentation.
Since the last newsletter, Proposal 47 is in the active voting stage and Proposal 48 was canceled and will be resubmitted as Proposal 49.
In Progress Votes
Status: Active: 1 day, 23 hrs left
Proposer: Getty Hill (CAP)
Voting Results: 662,442 For and 0 Against
Summary: Proposal 47 replaces Coinbase with Chainlink as the main reporter for Compound’s price feed. The Chainlink prices will be validated against the same Uniswap Anchored View contract as the current oracle system, with a deviation threshold of 15% instead of the current 20%. You can view this visual representation of how the Uniswap Anchor flow works for the BAT/USD market. As a failsafe, the system also allows the community multisig to switch a market’s primary oracle from Chainlink to Uniswap V2. Getty and the Chainlink team have performed a number of tests and analyses on the new price feed and commissioned Trail of Bits for an audit. Getty also created a website that compares the current price data with the new Chainlink implementation and the standard Chainlink implementation, as a sanity check to show that prices are being posted as expected. Community members like Getty Hill have been championing the switch to a new price feed since January, with the goal of improving the protocol’s overall security and ability to support a wide variety of new assets. The price feed is crucial to Compound’s safety, and all COMP token holders are encouraged to deeply review the deployed contract, original forum post, and Trail of Bits Audit Report before voting.
Status: Canceled June 16th, 2021
Proposer: Geoffrey Hayes
Voting Results: NA
Summary: Proposal 48 updates the cToken implementation for COMP, DAI, LINK, TUSD, UNI, USDT, and WBTC, all of which are the newer, upgradable markets. The proposed upgrade merges the delegate function into the base cToken implementation, as well as takes 2.8% of the liquidation discount and transfers it to the cToken reserves, reducing the effective liquidator incentive to the historical baseline of ~5%. The goal of the additional transfer to reserves is to help protect the protocol against the risk of insolvency due to cascading liquidations. As explained in the accompanying forum post, this patch is the first in a series of minor upgrades from Compound Labs that will improve the overall security and gas efficiency of the protocol. Proposal 48 was canceled during the review period and will be resubmitted shortly, as a community member noticed a potential improvement to transaction event logs.
See below for highlights from the Compound Community Forum, and join in the discussion:
Seize all cWBTC legacy collateral and transfer its WBTC it to cWBTC2 - @yaronvel suggests a new seizeAllowed function to migrate collateral from the legacy WBTC market to the new one.
Project Galaxy - Helping to build Compound’s first NFT-based Loyalty Campaign! - @pokka presents three ideas for NFT campaigns that the Compound community can use to promote and reward positive interactions with the protocol.
Should Compound Retroactively Airdrop Tokens to Early Users? - @allthecolors shares updated analysis on how early users would be rewarded with a COMP airdrop.
Permissionless Listing / Isolated Markets - @TylerEther presents a new idea for isolated markets that allow for supplying and borrowing of any asset without introducing risk to the broader protocol.
Grant to Develop a Futures Market DEX for cTokens (Convexity) - @0xLeo requests a grant to build hedge instruments for Compound’s variable interest rates.
Compound Risk Monitoring - Patrick Ho created a form to collect user feedback on the account health monitoring project.
Polygon/Matic Starport - Adam Bavosa shares notes from the first Polygon Starport development call, which is open to the public.
Be sure to either vote on proposals with your COMP, or delegate your COMP voting rights to a representative of your choice.
As a reminder, one of the best ways to participate in, and contribute to, the Compound ecosystem is to complete outstanding Request For Proposals (RFPs). The Compound Grants Program is offering substantial grants to individuals and organizations who work on the topics listed below. Have an idea in mind that's not included on the list? Feel free to apply with your own ideas here!
Voting with COMP collateral
Bringing Compound to L2's and other chains
Adding support for new assets on Compound
Improvements to the liquidations process
Uniswap V3 liquidity as collateral
Balancer V2 liquidity as collateral
Open source Compound Interface
Polygon Starport for Compound Gateway
Developer Community Call Recap
Current supply on Compound is at $12.8B from 291k unique addresses. 31% of this supply volume is DAI, 25% is USDC, and 22% is ETH. (source).
Open borrowing is at $5.6B from 8.1k unique addresses. 51% of this borrowing volume is DAI, 36% is USDC, and 7% is USDT. (source).
For live figures please refer to our Markets page.
Image Source: IntoTheBlock
Links & Discussions
The Compound Grants Program unveiled its new branding, with help from Paperclip Labs.
Flipside Crypto is offering COMP bounties to users who answer questions with on-chain data about the Compound protocol.
Mark Cuban shares his thoughts on why DeFi protocols like Compound represent a transformational shift for the traditional banking sector.
A new Compound bug bounty is live on Immunefi, focused on the patches with the Comptroller and the cToken implementation.
Paperclip Labs is looking for community feedback on their analytics tool for historical supply and borrow rates.