COMP Distribution and Governance Updates

Compound Digest - September 23, 2020

Highlighting the best of the Compound ecosystem. For more updates, join the Compound community on Discord, Twitter, and Comp.xyz.

Governance Updates

COMP Distribution Update

The original COMP distribution plan included an allocation of 775,000 COMP intended to be used by “the community to advance governance through other means — which will be announced at a future date.”

In a Medium post last week, Compound Labs CEO Robert Leshner provided further detail on how these 775,000 COMP have been distributed:

  • 500,000 COMP have been designated to Coinbase Earn until November 2021, at which point any remaining COMP will be sent back to the protocol’s reservoir contract

  • 275,000 COMP have been sent directly to the reservoir contract, to be allocated by the community through the governance process.

What this means is that the protocol now has 275,000 COMP in reserves that the community is empowered to re-allocate through governance, in order to incentivize future improvements to the protocol. For example, these reserves could be used to reward successful governance proposals or incentivize new third-party integrations. 

The Compound community welcomes your thoughts on how best to leverage these new COMP reserves; please share your ideas in the Compound governance forum.

Completed Votes

Since the last newsletter, Proposals 22 and 23 have successfully passed through the Compound governance system with wide voting margins.

Proposal 22: New Feature: Borrow Caps

  • Status: Executed September 13th, 2020

  • Proposer: blck

  • Voting Results: 805,960 For and 15,015 Against

  • Summary: A new comptroller with a “Borrow Caps” feature has been implemented, allowing Governance to limit the total quantity of borrowing in a market. Borrow Caps can be used to limit irrational activity, or to potentially limit the total value-at-risk that suppliers of an asset face (due to bugs, attacks, or unforeseen catastrophes).

Proposal 23: Upgrade cUSDC Interest Rate Model

  • Status: Executed September 21st, 2020

  • Proposer: Dharma

  • Voting Results: 427,750 for and 0 Against

  • Summary: Submitted by Dharma on behalf of Arr00, Proposal 23 updates cUSDC’s interest rate model to the LegacyJumpRateModelV2 that is currently used for the cDAI and cUSDT markets (base rate of 0%, 4% at 80% utilization, and 25% at 100% utilization). This proposal standardizes the interest rate models for all stablecoins on Compound.

Potential Governance Proposals

The first Compound Autonomous Proposal (CAP), Set Pause Guardian to Community Multi-Sig, currently has 71,152 votes delegated to it, and requires 100,000 in order to move into the formal voting process. Consider delegating your support to the CAP, or follow this guide to create your own if you have at least 100 COMP.

Ongoing Discussions

See below for highlights from the Compound governance forum, and join in the discussion:

  • Adding New Markets to Compound” - @hayesgm describes the steps taken to deploy the cUNI cToken contract , which can serve as a guide for developers looking to add new markets to Compound.

  • Call to Action” - @rleshner encourages the community to use the protocol’s larger COMP reserves to incentivize protocol upgrades like gas optimization, governance bounties, and new markets.

  • Distribution of COMP token to early users, pre-COMP distribution period” - @Andre1 suggests that the Compound protocol automatically issues COMP to early users, similar to the path taken by Uniswap.

  • Adding COMP as an asset?” - @compoundbart suggests adding COMP as the next supported market on Compound.

Be sure to either vote on proposals with your COMP, or delegate your COMP voting rights to a representative of your choice.

Markets Update

The current supply on Compound is at $1.7B from ~36k unique addresses. In the past seven days, approximately $1.1B  (gross) was added to the protocol, in 5.9k transactions. 46% of this volume was DAI, 33% was USDC, 17% was ETH, and 2% was WBTC (source). 

Open borrowing is at $957M from 5.2k unique addresses. In the past seven days, approximately $425M (gross) was borrowed from Compound in 1.2k transactions. 81% of this volume was DAI, 11% was USDC, 3% was ETH, and 3% was USDT (source). 

For live figures please refer to our Markets page.

Links & Discussions

Tweet of the Week

Compound.js, Governance Updates, Autonomous Proposals, OKEx Integration

Compound Digest - September 10, 2020

Highlighting the best of the Compound ecosystem. For more updates, join the Compound community on Discord, Twitter, and Comp.xyz.

Compound.js in Beta Testing

Compound Labs has launched the beta version of Compound.js, a JavaScript SDK for Ethereum and the Compound Protocol. Rather than programming in Solidity, developers can use Compound.js to interact with Compound’s smart contracts using JavaScript or Node.js. 

Key protocol methods like mint, redeem, borrow, and repayBorrow can now be executed using simple 1-liners, making it easier and faster for developers to build applications on top of Compound. In addition to Compound methods, developers can also make generic Ethereum read and write calls to any smart contract. 

You can read more about Compound.js in the Medium announcement, view the source code on GitHub and NPM, and review developer documentation on the Compound website.

Governance Updates

Up for Voting

Proposal 22: New Feature: Borrow Caps

Submitted by community member @blck on behalf of @Arr00, Proposal 22 would implement a new Comptroller with a “Borrow Caps” feature. This proposal has been discussed at length in the community forums -- see this post for full context.

Borrow caps would enable governance to set limits for total borrowing in each market. For each new borrow request in a market, the new total borrows would be checked against the borrow cap and revert if the new total borrows is too high.

Borrow caps are intended to be used as a safeguard for the protocol, for example to defend against “infini-mint” risk, where a collateral position is inappropriately given a value approaching infinity, and a bad actor tries to borrow all $300 million of Ether currently held in the protocol.

This proposal does not actually implement any borrow caps -- usage of the feature must be set through future proposals.

Separately but importantly, this is the first Compound governance proposal to include a reward to the developer of the proposal’s code, and would transfer @Arr00 approximately $5,000 worth of SAI out of the protocol’s reserves.

The vote for this proposal ends on September 11 at approximately 10:30pm UTC.

Completed Votes

Since the last newsletter, Proposal 21 has passed with 85% support from the community:

Proposal 21: Reduce COMP emissions by 20%

  • Status: Executed August 31st, 2020

  • Proposer: Gauntlet

  • Voting Results: 1,119,629 For and 195,969 Against

  • Summary: CompSpeed has been lowered from to 0.176 COMP per Ethereum block. This lower emission rate helps ensure that the protocol has a large reserve of COMP to incentivize positive community and user participation. 

Ongoing Discussions

See below for highlights from the Compound governance forum, and join in the discussion:

  • Community Gas Fund” - @arr00 suggests the creation of a community gas fund funded by SAI reserves, in order to subsidize new contract deployments and gas-less governance voting.

  • Lower Proposal Threshold to 100 COMP” - @lay2000lbs suggests lowering the governance proposal threshold from 100k COMP to 100 COMP, which has sparked a vibrant discussion around empowering more users to participate in governance.

  • Financially Incentivizing voting/voting delegation” - @odette introduces the concept of COMP emissions going to governance participants.

  • Update cUSDC interest rate model” - @arr00 suggests updating the cUSDC interest rate model to match the current cDAI and cUSDT interest rate models.

  • YFI Listing Proposal” - @paraficapital suggests adding YFI as a supported market on Compound.

Be sure to either vote on proposals with your COMP, or delegate your COMP voting rights to a representative of your choice.

Introducing Autonomous Proposals

Compound Labs has released a new tool to make it easier for community members to gather votes for a proposed protocol upgrade: Compound Autonomous Proposals (CAPs)

In the current governance system users need 100k delegated COMP to submit a formal proposal into the voting process - which can be a daunting ask for many community members. With this tool users can now create a CAP with only 100 COMP. They can then collect votes to be delegated to the CAP itself, and once the CAP has reached the 100k delegated COMP threshold it can be submitted as a formal proposal into the governance voting process.

Here is the first-ever Autonomous Proposal: Set Pause Guardian to Community Multi-Sig. It needs >100,000 delegated votes to be submitted as a formal proposal. To delegate to it, visit the Vote page of the Compound App, and delegate your votes to the address of the CAP (0x0cde9622b23ababfccef9755b5f7c9e759ef4820).

You can read more about Autonomous Proposals in the announcement on Medium. We’re excited to see what the Compound community will build and propose with a lower barrier to entry for governance!

OKEx Launches Compound Integration

OKEx, one of the top spot and derivative exchanges by volume, has integrated Compound to allow users to earn interest on all of the assets that the protocol supports (BAT, DAI, ETH, USDC, USDT, WBTC, ZRX). The Earn product features no minimum holding period aside from 1-day redemption processing, and additional COMP bonuses for certain assets.

OKEx has also built a flexible borrowing product that will launch in the near future, marking the first time a major exchange will have integrated Compound’s borrowing functionality. 

If you are a developer interested in adding Compound interest rates to your application, exchange, custody offering, or any other product, please feel free to reach out to our team for technical guidance and support. 

Markets Update

The current supply on Compound is at $1.3B from ~36k unique addresses. In the past seven days, approximately $633M (gross) was added to the protocol, in 7k transactions. 40% of this volume was USDC, 28% was ETH, 27% was DAI, and 3% was USDT (source). 

Open borrowing is at $671M from 5.2k unique addresses. In the past seven days, approximately $168M (gross) was borrowed from Compound in 1.5k transactions. 57% of this volume was DAI, 24% was USDC, 12% was ETH, and 3% was BAT (source). 

For live figures please refer to our Markets page.

Links & Discussions

  • Multis shared a map of the next-generation financial system, with Compound powering the core crypto infrastructure.

  • Binance Academy published a report on the basic functionality and purpose of the Compound Protocol.

  • Frontier Wallet launched a Compound integration inside of the mobile application, giving users access to Compound by linking Trust Wallet, imToken, Fortmatic, Metamask Mobile, or Coinbase Wallet.

  • One day after the release of Autonomous Proposals, developer Dennison Bertram shared a fork called “COMP - RFP”, which intends to create an incentivized bounty market to crowdfund the creation of Compound governance proposals.

Tweet of the Week

Governance Updates, Binance Offers cDAI Interest Rates

Compound Digest - August 27, 2020

Highlighting the best of the Compound ecosystem. For more updates, join our community on Discord, Twitter, and Comp.xyz.

Governance Updates

There are currently many active and important discussions in the Compound governance forum. See below for highlights, and please add your perspective:

In addition, there is a proposal from @tarun and Gauntlet Networks that is in the active voting process right now.

Proposal 21: Reduce COMP emissions by 20%

Based on the “Systematically Reduce Emission Quantity” forum discussion led by @tarun, Gauntlet Networks has created Proposal 21 to lower the compSpeed (the emission rate of COMP) to 0.176 COMP per Ethereum block. Their stated intention is to follow up this proposal, if successful, with a proposal to add a vesting mechanism to COMP emissions as well.

The vote ends on August 29 at approximately 1:09pm UTC.

Completed Votes

As for votes completed since the last newsletter, Proposals 19 and 20 passed with effectively unanimous support:

Proposal 19: Open Price Feed

  • Status: Executed August 17th, 2020

  • Proposer: Geoffrey Hayes

  • Voting Results: 701,578 For and 0 Against

  • Summary: The Compound protocol now relies on the Open Price Feed to source price data for its markets, with Coinbase and Uniswap as the first reporters. Read the community discussion on the proposal here

Proposal 20: Upgrade cUSDT Interest Rate Model

  • Status: Executed August 21st, 2020

  • Proposer: blck

  • Voting Results: 898,364 For and 1 Against

  • Summary: With help from fellow community member Ar00, blck proposed and passed a new interest rate model for cUSDT, based on the JumpRateModelV2 upgrade that the Dharma team passed for cDAI. Read the community discussion on the proposal here

Join the Compound governance discussions at Comp.xyz, and be sure to either vote on proposals with your COMP, or delegate your COMP voting rights to a representative of your choice.

Binance Offers cDAI Interest Rates

Binance has launched DeFi Staking, allowing its users to earn interest on DAI by supplying it to Compound, directly through the Binance interface

Currently, Binance offers three staking options, with customized terms around minimums/maximums, unlock period, and time commitment:

This type of integration highlights the flexibility of the base functionality of the Compound protocol, which enforces none of Binance’s customized terms (it has no minimums/maximums, no unlock period, and no required time commitment), but still fully empowers Binance to design and launch customized interest rate products that make the most sense for its own users and its own business. 

Highly programmable, openly accessible, transparent, and reliable - this is the power of DeFi!

Third-party integrations like Binance’s are crucial for broadening access to yield opportunities and simplifying the onboarding experience for users. If you are a developer interested in adding Compound interest rates to your application, exchange, custody offering, or any other product, please feel free to reach out to our team for technical guidance and support.  

Markets Update

The current supply on Compound is at $1.7B from ~35k unique addresses. In the past seven days, approximately $487M (gross) was added to the protocol, in 6.3k transactions. 47% of this volume was USDC, 25% was DAI, 20% was ETH and 3% was USDT (source). 

Open borrowing is at $963M from 5.2k unique addresses. In the past seven days, approximately $157M (gross) was borrowed from Compound in 1.7k transactions. 62% of this volume was DAI, 12% was USDC, 12% was USDT, and 8% was BAT (source). There is currently $13.8mm of total accrued interest that has been generated by borrowers, up from $10.1mm  on July 1st of this year. 

For live figures please refer to our Markets page.

Links & Discussions

  • Compound, alongside Huobi, Nest, dydx, and Maker, has helped launch the Global DeFi Alliance to promote research and collaboration among projects in the space.

  • Greenfield One, a crypto-focused VC firm, has released a research report highlighting the importance of governance systems in DeFi protocols like Compound. 

  • Uniswap announced Token Lists, a new standard for creating lists of ERC20 tokens that they hope helps users distinguish legitimate tokens from scams, fakes, and duplicates. Here is the Compound Token List.

Tweet of the Week

Launching the Open Price Feed, Protocol User Metrics Update, and More

Compound Digest - August 14, 2020

Highlighting the best of Compound & the DeFi ecosystem. For more updates, join our community on Discord, Twitter, and Comp.xyz.

Open Price Feed

Compound Labs has officially launched the Open Price Feed.

The Open Price Feed is an open-source project where a set of reporters signs price data which is posted on-chain for use by DeFi protocols. There is no privilege required to post prices, and we encourage the community to build additional posters to keep prices up-to-date. The system is designed to support price data for any token, but initially supports prices for BAT, WBTC, COMP, DAI, ETH, KNC, LINK, REP, SAI, USDC, USDT, and ZRX. The system is also compatible with having many different reporters - notably, Coinbase is the first major reporter.

Proposal 19: Open Price Feed, currently in the active voting phase in Compound’s governance system, would switch the Compound Protocol’s current price feed to the new Open Price Feed.  Upon implementing the Open Price Feed, the Compound protocol would initially be using the price data provided by Coinbase as well as a time-weighted average price from Uniswap's on-chain markets to ensure price integrity. This upgrade represents the last critical step in fully removing Compound Labs as an administrator over any part of the protocol. 

For more information on the Open Price Feed please see the following links:

Protocol Metrics Update

A version of the below was featured in last week’s edition of Our Network. Data is updated as of August 14th.

The table above shows the average economic activity for each user of the Compound protocol. By taking the weighted average supply APY (2.45%) and multiplying it by the average supply amount ($48,335), we get an average interest earned amount of $1,182 per user. This same basic formula can be applied to the borrowing side of the protocol, where the weighted average borrow APY is 4.94% and the average borrow amount is $25,050, which gives us an average interest expense of $1,237 per user. The COMP portion of the economic calculation is based on a market price of $199 on Coinbase at the time of publication. This data can be a good reference point for applications, wallets, exchanges, or custodians who provide Compound as a service for their users and decide to take a cut of the economics as a potential business model. (Source)

Markets Update

The current supply on Compound is at $1.6B from ~34k unique addresses, with supply passing $2B for the first time earlier this week. In the past seven days, approximately $1.1B (gross) was added to the protocol, in 5.9k transactions. 77% of this volume was DAI, 14% was USDC, 8% was ETH and 1% was USDT (source). 

Open borrowing is at $870M from 4.9k unique addresses. In the past seven days, approximately $1.2B (gross) was borrowed from Compound in 6.5k transactions. 70% of this volume was DAI, 22% was ETH, 7% was USDC, and 1% was USDT (source). There is currently $11.7mm of total accrued interest that has been generated by borrowers, up from $3.2mm on May 1st of this year. 

For live figures please refer to our Markets page.

Links & Discussions

Tweet of the Week

Governance Updates, Delegate by Signature, HAL Q&A

Compound Digest - July 30, 2020

Highlighting the best of Compound & the DeFi ecosystem. For more updates, join our community on Discord, Twitter, and Comp.xyz.

Two new proposals have passed through Compound’s governance system since our last newsletter, with both passing almost unanimously. Below, we highlight each proposal and the broader significance for users and stakeholders of the protocol. 

Proposal 17: REP Migration

  • Status: Executed July 24th, 2020

  • Proposer: blck

  • Voting Results: 757,201 For and 1 Against

  • Summary: Ahead of the launch of Augur v2 on July 28th, blck has initiated a process of deprecating REPv1 on Compound. The proposal disincentivizes the use of cREP by disabling supply and borrow functionality, disabling COMP distributions, and setting the reserve factor to 100%. Users are encouraged to wind down outstanding cREP positions, as a potential fork event is likely in the near future. Read the community discussion on the proposal here

Proposal 18: Upgrade cDai Interest Rate Model

  • Status: Executed July 28th, 2020

  • Proposer: Dharma

  • Voting Results: 895,108 For and 1 Against

  • Summary: Following a previously failed proposal (012) earlier in July, this proposal from Dharma makes three changes to the interest rate model of cDAI: Increase the supply APY from 15% to 25% at 100% utilization, change the utilization rate ‘kink’ from 90% to 80%, and increase the slope of the interest rate curve before the ‘kink’ (gapPerBlock from 2% to 4%). Read the community discussion on the proposal here

Join the Compound governance discussion on Comp.xyz, or delegate your COMP voting rights to the delegate of your choice. Leading delegates can be seen on the Delegate Leaderboard.

Delegation and Voting with EIP-712 Signatures

Compound protocol governance features EIP-712 signature functionality, which enables users to sign a delegate or vote transaction for free, so a third-party can and write the transactions to the blockchain for them (and pay the gas fees).

This functionality is powerful. It enables, for example, third-party protocol politicians to request signed transactions from other COMP-holders, and aggregate voting power to have a greater influence on Compound governance. 

To learn how to build a user interface that takes advantage of this functionality, see the developer guide for Delegation and Voting with EIP-712 Signatures on the Compound blog.

HAL Q&A

What does HAL do?

HAL is a 1-click-setup IFTTT for Ethereum, featuring dApp-specific integrations with webhooks, Discord, Slack, Telegram, Twitter, and emails. Using new Recipes you can create and share your favorite triggers in a new and collaborative way! We also created the @compoundgovbot on twitter, which automatically tweets when there are on-chain events related to Compound's governance system.

What went into building the initial app?

The seed is basically what we express in the Gluing Manifesto. We strongly believe that the best way to leverage the full potential of decentralized technologies is by designing an economic system based on a tight interaction between decentralized and centralized components where developers and companies judiciously decide how to mix them depending on which components need to be trustless or not. There's a gap between decentralized and centralized systems that can be filled by gluers, entities that are logically, architecturally, and politically centralized but are not custodial, are replaceable at any time, and can fail. And here's HAL, the first version of a gluer connecting both worlds!

What are the next steps and goals for HAL?

In the short term, we are running a 30-day sprint to create new automation to make Ethereum dApps easier for end-users, and integrating more Apps. Along with that, you are going to see new login mechanisms (e.g. using Metamask) and the on-chain automation off-chain aided featuring Gelato Finance and Gnosis Safe. In the meanwhile, we are thinking how to decentralize HAL and maybe a token could be part of the story.

What does your tech stack look like?

Our stack is 3-tier, the app, the API layer, and the event engine. The app is based on React and is the point where we invested much effort in the last weeks, to offer a great UX for our users. The API layer is based on Node.js and it's serverless, in this way we can be fast on implement changes and eventually move back and forth logic from frontend to the API. In addition, it helps to lower costs and don't bother too much about Sysops (thanks to AWS). The event engine is written in Go using a queue architecture and it's where the magic happens aka your recipes/triggers are interpreted and on match execute the actions you set.

What other ideas do you have that devs can use with Compound to build something awesome?

Compound is the lego of DeFi. We already see many great products built on top of it (e.g PoolTogether, IdleFinance) and clever usages (e.g. Curve). Options are trendy right now and I would like to see some implementation which uses Compound as one of the underlying protocol to realize this.

Emiliano Bonassi, Founder, Hal.xyz 

Markets Update

Current supply on the Compound protocol is at $1.9B from ~33k unique addresses. In the past seven days, approximately $2B (gross) was added to the protocol, in 9.1k transactions. 72% of this volume was DAI, 16% was ETH, 8% was USDC, and 2% was USDT. DAI supplied to Compound is currently at $1.2B, marking the first time in the protocol’s history that a single market has passed the billion-dollar threshold. 

Open borrowing is at $1.2B from 4.7k unique addresses. In the past seven days, approximately $1.4B (gross) was borrowed from Compound in 3k transactions. 89% of this volume was DAI, 8% was USDC, and 1% was WBTC.

For live figures please refer to our Markets page.

Links & Discussions

Tweet of the Week

Niraj Pant @niraj
Excited to announce the launch of
comp.xyz, a new forum for Compound governance! As Compound continues to scales up, it's imperative that the community gets involved in long-form discussions around the future of the protocol.Compound Community ForumForum for Compound Finance governance discussionscomp.xyz

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