Compound Digest - June 22, 2022
S&P Global maintains Compound Treasury’s risk profile
Given the recent significant market events, S&P Global published a bulletin on Compound Treasury, "Risk Profile Remains Consistent With Our Initial Expectations, Despite Large Crypto Price Corrections." In the bulletin, S&P notes the following as support for maintaining the risk profile:
Investor redemptions were met smoothly within the contractual window
Although loan liquidations on the Compound protocol have risen, loan losses so far have remained de minimis
The value of USDC against USD has remained stable, and convertibility of USDC into USD has been maintained
Despite continued pressure on the supply interest rate for USDC, the capital base of the company only moderately reduced since the initial rating assignment
See the full bulletin here (subscription required).
Compound In the News
Circle is launching Euro Coin
Circle will be launching Euro Coin (EUROC), their newest stablecoin, on June 30th, with a full reserve model such that it’s always redeemable 1:1 for euros.
Euro Coin is launching with support from Compound Labs alongside other ecosystem leaders, including Curve, Uniswap, Metamask, Ledger, and more. Euro Coin’s addition to the Compound Protocol is pending its proposal being submitted and passed by the community.
Developers can begin integrating with the Euro Coin smart contract today, ahead of the official launch on June 30th when liquidity will begin flowing.
It was great to connect in-person with our partners and new friends in Austin at Consensus earlier this month. Some of the main themes around DeFi that arose at the conference:
Institutional interest in crypto and DeFi continues to grow, with significant presence at Consensus from Fidelity, FIS, Mastercard, Paypal, and more
During bear markets, it’s time to focus on innovation and building more value within crypto, not hype
An open financial system is inevitable, and holds the potential for benefiting massive amounts of users, even if access might be through centralized platforms
Despite the 100 degree Austin weather, thanks to all those that were able to make it to our Compound Happy Hour.
Protocol Governance Updates
Summarized below are highlighted proposals since our last newsletter - find all proposals at https://compound.finance/governance.
Status: Failed June 18, 2022
Voting Results: 112,179 For and 412,712 Against
Summary: We recommend decreasing reserve factors for cUSDC, cUSDT, and cTUSD from 7.5% to 3.75%, and decreasing all other reserve factors (cETH, cWBTC2, cDAI, cBAT, cZRX, cUNI, cLINK) by 500 bps (for example, decreasing ETH reserve factor from 20% to 15%). More details on Gauntlet’s updated reserve factor methodology here.
Status: Executed June 13, 2022
Voting Results: 613,752 For and 0 Against
Summary: Updated Risk Parameters aligning with Moderate Risk Level - increasing collateral factor for cUSDC to 84%; cLINK to 79%; cSUSHI to 73%; cAAVE to 73%; cYFI to 75% .For more details, please see Gauntlet's Parameter Recommendation Methodology and Gauntlet's Model Methodology.
Status: Executed May 31, 2022
Voting Results: 731,151 For and 0 Against
Summary: Updated Risk Parameters aligning with Moderate Risk Level - increasing collateral factor for cDAI to 82.5%; cLINK to 77%; cMKR to 73%; cUSDC to 82.5%; cYFI to 73% .For more details, please see Gauntlet's Parameter Recommendation Methodology and Gauntlet's Model Methodology.
Ongoing Discussions and RFPs
See the Compound Community Forum to see and join in the latest discussion.
As a reminder, one of the best ways to participate in, and contribute to the Compound ecosystem is completing outstanding Request For Proposals (RFPs)
Current supply on Compound is at $3.7B from 301k unique addresses. 24% of this supply volume is USDC, 21% is ETH, and 19% is WBTC. (source).
Open borrowing is at $869k from 8.9k unique addresses. 36% of this borrowing volume is DAI, 33% is USDT, and 21% is USDC. (source).
For live figures please refer to our Markets page.
Image Source: IntoTheBlock