Gauntlet Risk Management Dashboard, Coinbase Earn COMP Update, Governance Updates

Compound Digest - November 12, 2021

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

Gauntlet Risk Management Dashboard

The Gauntlet team recently launched the full version of the Compound Risk Management Dashboard as a part of their ongoing initiative to optimize yield, capital efficiency, and mitigate depositor losses on the Compound protocol. The dashboard shows the data and rationale behind Gauntlet’s dynamic risk parameters and contains the following sections:

  • Gauntlet Top Recommendations: Shows suggested changes to help optimize Capital Efficiency and Value at Risk.

  • Value At Risk: Shows capital at risk due to insolvencies and liquidations when markets are under duress, broken down by collateral type.

  • Borrow Usage: Shows the percentage of borrowing power that borrowers are currently utilizing.

  • Collateral Risk: Shows the risk for each collateral type in Compound.

The Gauntlet team is looking for community feedback on the dashboard, so feel free to add your comments to the forum thread or through the “Send Feedback” button on the interface. 

Coinbase Earn COMP Update

In September of 2020, the Compound Labs Team provided an update on the distribution of COMP tokens to the community, which included up to 500,000 COMP designated to Coinbase Earn. The Coinbase Earn program walked users through the process of supplying USDC to Compound and rewarded them with COMP for learning about the basic protocol mechanics. More than 5 million people learned about the Compound protocol through these videos and a Coinbase Wallet onboarding lesson.

The Earn program has since concluded, and Coinbase has transferred 114,100 COMP, 5,426 ETH, and 1,319,371 USDC to the Timelock. The community can use these assets to fund other initiatives that advance governance and benefit the Compound ecosystem.  

Governance Updates

Since the last newsletter, Proposal 66 passed through the governance system with broad community support, Proposal 67 failed, Proposal 68 is queued, and Proposal 69 is in the active voting stage. 

Active Votes

Proposal 69: Risk Parameter Updates for LINK, MKR, SUSHI, and YFI

  • Status: Active 2 days, 7 hrs left

  • Proposer: Gauntlet

  • Voting Results: 0 For and 0 Against

  • Summary: Proposal 69 increases the collateral factors of the following markets: LINK from 60% to 65%, MKR from 45% to 55%, SUSHI from 45% to 55%, and YFI from 55% to 60%. The increased capital efficiency for these markets follows the Moderate Risk Level selected by the Compound community, and is an ongoing task of the Gauntlet team as a part of the  Dynamic Risk Parameters initiative. More information is available on the original forum thread.

Completed Votes 

Proposal 68: End cCOMP Borrow Rewards

  • Status: Queued November 10th, 2021

  • Proposer: Arr00

  • Voting Results: 749,593 For and 0 Against

  • Summary: Proposal 68 ends COMP rewards for borrowers in the cCOMP market. The combination of the $28.95M borrowing cap and rewards distribution in the cCOMP market has created a negative borrowing rate, and prevented the market from reaching equilibrium. Ending these rewards will create a positive borrowing rate and allow the market to return to a healthy state. COMP rewards will remain the same for suppliers of this market. On the forum thread, community members are also discussing removing or raising the cCOMP borrowing cap.

Proposal 67: [Temp. Check] Should Compound retroactively distribute COMP tokens to early users?

  • Status: Failed November 8th, 2021

  • Proposer: Tyler Lowen

  • Voting Results: 121,013 For and 279,499 Against

  • Summary: Rather than changing or upgrading the protocol, Proposal 68 is the first use of the governance system to hold a vote. The proposal asked the community for their feedback on whether COMP tokens should be distributed to early users before further work is done on the distribution mechanics. This discussion has been active for the past year, with proponents arguing that retroactive COMP rewards would further decentralize the protocol and reward early users, and opponents arguing that the tokens in the treasury should only be used for future incentives.

Proposal 66: Risk Parameter Updates for AAVE, LINK, MKR, SUSHI, USDC, and YFI

  • Status: Executed November 9th, 2021

  • Proposer: Gauntlet

  • Voting Results: 1,028,127 For and 0 Against

  • Summary: Proposal 66 increases the collateral factors of the following markets: AAVE from 50% to 60%, LINK from 50% to 60%, MKR from 35% to 45%, SUSHI from 40% to 45%, USDC from 75% to 80%, and YFI from 35% to 55%. The increased capital efficiency for these markets follows the Moderate Risk Level selected by the Compound community, and is an ongoing task of the Gauntlet team as a part of the  Dynamic Risk Parameters initiative. The change to the USDC market also marks the first time in the protocol’s history that an asset has a collateral factor greater than 75%.  More information is available on the original forum thread.

Ongoing Discussions

See below for highlights from the Compound Community Forum, and join in the discussion:

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

Active RFPs

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!

  • RFP 1: Decentralized batching contract | $25k

  • RFP 2: Voting with COMP collateral | $50k

  • RFP 3: Bringing Compound to L2's and other chains | $50k

  • RFP 4: Adding support for new assets on Compound | $12.5k 

  • RFP 5: Gas optimizations | TBD

  • RFP 6: Improvements to the liquidations process | $50k

  • RFP 7: Uniswap V3 management platforms as collateral | $25k

  • RFP 8: Balancer V2 liquidity as collateral | $25k

  • RFP 9: Open source Compound Interface | $50k

  • RFP 10: Ripcord wallet | TBD

  • RFP 11: Governance/Voters rewards | TBD

  • RFP 12: cToken Cleanup | $250k

  • RFP 13: cToken Interest Rate Model Changes | $100k

  • RFP 14: Gas Savings for cToken and Comptroller contracts | $100k

  • RFP 15: Dynamic COMP reward distribution | $100k

  • RFP 16: Migrate legacy cTokens | $50k

  • RFP 17: Deploy upgradeable cETH contract and migrate users to it | $50k

  • RFP 18: Uniswap V3 liquidity as collateral | $100k

  • RFP 19: Interest rate curve research | $5k

  • RFP 20: Optimism Starport for Compound Gateway | $100k

Developer Community Call Recap

The Compound community held a Developer Community Call last week to discuss ongoing protocol and application development. You can access an audio recording of the call here

Markets Update

Current supply on Compound is at $19.8B from 297k unique addresses. 33% of this supply volume is ETH, 22% is DAI, and 18% is USDC. (source). 

Open borrowing is at $7.7B from 9.2k unique addresses. 46% of this borrowing volume is DAI, 38% is USDC, and 8% is USDT. (source). 

For live figures please refer to our Markets page

Image Source: IntoTheBlock

Links & Discussions

  • Messari shares their State of Compound Q3 2021 report, which analyzes the macro and micro trends for the protocol over the last three months.  

  • Ripple hosts Robert Leshner for a discussion on institutions’ current usage and future adoption of decentralized finance 

  • Adam Bavosa updated the developer guide for borrowing assets from the Compound protocol. 

  • Dune Analytics’ creator Supernova created a dashboard delving into some of the protocol’s key metrics such as aggregate LTV and borrowers by address age. 

Tweet of the Week 

Twitter avatar for @jdorman81Jeff Dorman, CFA @jdorman81
Love Love Love seeing this transparency from @compoundfinance Like @MessariCrypto, we at @arca are huge advocates of voluntary transparency from projects we invest in, & will continue to point out bad actors, incl some of the exchanges who are complicit
ar.ca/blog/the-good-…

Maartje Bus @maartjebus

1/ @MessariCrypto just offered a glimpse into the future of financial reporting. If you are interested in becoming a protocol CFO, read on for key takeaways from the @compoundfinance Q3 Analyst Call featuring @rleshner @RyanWatkins_ and @twobitidiot. https://t.co/OjKb9V921s 👇

 

Compound Treasury Updates, COMP Bug Fix, Dynamic Risk Parameters

Compound Digest - October 14, 2021

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

Compound Treasury Updates

Compound Treasury is continually improving to meet the demands of institutional clients. After launching the 4.00% APR account in July, the online Dashboard has been updated to include real-time balances, easy funding & withdrawal methods, custom reporting, and access controls. We’ve been delighted at the positive feedback from our early users and are rapidly expanding the product features and customer base.

Treasury has outgrown its old home living within the Compound Protocol’s website at compound.finance. Today, the product has moved to a new home: compoundtreasury.com.

Our team is hiring a Director of Marketing to help spread the word about Treasury. If you have experience scaling software businesses and want to be at the intersection of DeFi and Fintech, we invite you to apply and build the future of finance with us.

Interested in becoming a Treasury customer? Schedule a product demo with our team today.

COMP Bug Fix

When Proposal 62 was executed on September 29th, it introduced a bug into the Comptroller contract that allowed users in certain markets to accrue and claim far more COMP than intended. The end result of the bug is that 163k COMP were incorrectly claimed & returned to the community Timelock, 130k COMP remained in the Comptroller, which could have been incorrectly claimed, and ~200k misallocated COMP are currently outstanding. Users who claimed erroneously accrued COMP are strongly encouraged to return the tokens to the community Timelock. 

The event has galvanized the community to implement more robust code testing and simulation ahead of future governance proposals. Below are forum posts where the community is discussing various security measures to avoid errors moving forward.

The Compound community has been a pioneer of decentralized protocol development, and all community members are encouraged to help improve these standards and best practices over time. 

Governance Updates

Since the last newsletter, Proposals 61, 62, and 64 all passed through the governance system with broad community support, Proposal 63 was canceled, and Proposal 65 is in the active voting stage. 

Pending Votes

Proposal 65: Correct Over-Accrued COMP

  • Status: Active - 2 days, 3 hrs left

  • Proposer: Tyler Lowen

  • Voting Results: 0 For and 0 Against

  • Summary: Proposal 65 would fully restore the COMP claim functionality for all markets and return the Compound protocol to its normal operating state. The proposal also creates a list of users who accrued more COMP than they should have, and introduces a one-off function called fixBadAccruals that behaves in the following way: 

    • If the user's amount of accrued COMP is greater than the amount they over-accrued, the amount over-accrued is subtracted from their accrued amount (compAccrued).

    • If the user's amount of accrued COMP is less than the amount they over-accrued (i.e. they successfully claimed more COMP than they should have), their accrued amount (compAccrued) is set to 0 and the difference (i.e. what they owe the protocol) is saved to compReceivable. This new storage variable is only used for record-keeping at the moment.

    • An event - CompReceivableUpdated - is emitted when compReceivable is updated.

    • An event - CompAccruedAdjusted - is emitted when this function updates compAccrued.

  • It is important to note that a subsequent proposal will be needed to update the record-keeping for users who returned over-accrued COMP to the community Timelock. All community members are encouraged to analyze the forum thread, simulation, and code before voting on the proposal

Completed Votes

Proposal 64: Fix COMP Accrual Bug

  • Status: Executed October 8th, 2021

  • Proposer: Tyler Lowen

  • Voting Results: 1,037,107 For and 0 Against

  • Summary: Proposal 64 patched the bug introduced by proposal 62 without reverting transactions when claiming COMP, which was a feature requested by third-party integrators. The proposal also allows the COMP distribution to continue for users who did not interact with the affected markets (cTUSD, cMKR, cSUSHI, cYFI, cAAVE, and cSAI). An analysis of Proposal 64 by Compound Labs CTO, Geoffrey Hayes, can be found here.

Proposal 63: Temporarily Disable COMP Rewards

  • Status: Cancelled October 6th, 2021

  • Proposer: Arr00

  • Voting Results: 1,045,810 For and 162,221 Against

  • Summary: Proposal 63 was developed and submitted to the governance system within hours of the COMP distribution bug being discovered. The proposal sought to temporarily disable the distribution of COMP rewards until a longer-term solution could be implemented. Arr00 ultimately decided to cancel the proposal after the voting period, since it would have reverted transactions and broken several third-party integrations that rely on claiming COMP. Further analysis is available on the forum thread.

Proposal 62: Split COMP rewards distribution and bug fixes

  • Status: Executed September 29th, 2021

  • Proposer: Tyler Loewen

  • Voting Results: 729,781 For and 0 Against

  • Summary: Proposal 62 updated the Comptroller logic to have two different COMP speeds for the supply and borrow side of each market on Compound, and fixed a previous compSpeed bug that prevented certain markets from having a COMP reward. As explained in the “COMP Bug Fix” section above, this proposal introduced a new bug that allowed certain borrowers to claim far more COMP than they were supposed to be able to from the Comptroller contract. More information on the proposal can be found on the forum thread.

Proposal 61: Dynamic Risk Parameters

  • Status: Executed September 27th, 2021

  • Proposer: Gauntlet

  • Voting Results: 1,480,497 For and 6,564 Against

  • Summary: Proposal 61 streams a COMP grant to the Gauntlet team, in exchange for continuous market risk management and the development of a risk management dashboard for the community. The Gauntlet team will perform regular analysis of parameters including Collateral Factor, Close Factor, Borrow Cap, Reserve Factor, and Liquidation Incentive, and create new governance proposals to optimize for yield, capital efficiency, and mitigate depositor losses. Community members can read more about the scope and cost of this program on the forum thread 

Ongoing Discussions

See below for highlights from the Compound Community Forum, and join in the discussion:

  • Community Risk Level Consensus Check - @inkymaze asks the community for feedback on the level of risk tolerance for Gauntlet’s dynamic parameters. 

  • Add Market: Matic - @nbax contends that Matic’s “ungovernance” process makes it a compelling alternative to existing stablecoins and would be a valuable asset to have on Compound.

  • Compound Risk Dashboard by Gauntlet - @shaan from Gauntlet presents the plans for the new Compound Risk Dashboard approved in Proposal 61 ‘Dynamic Risk Parameters’. 

  • Analysis of Proposal 64 - Compound Labs team member @hayesgm shares his analysis of Proposal 64 and @tylerether explains the thought process behind Proposal 65.

  • Building a more robust deployment process to prevent future meltdown - @kevt explains his idea for a rollback mechanism that could be triggered by the community in the event of a flawed proposal, reversing the changes the proposal made.

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

Active RFPs

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!

  • RFP 1: Decentralized batching contract | $25k

  • RFP 2: Voting with COMP collateral | $50k

  • RFP 3: Bringing Compound to L2's and other chains | $50k

  • RFP 4: Adding support for new assets on Compound | $12.5k 

  • RFP 5: Gas optimizations | TBD

  • RFP 6: Improvements to the liquidations process | $50k

  • RFP 7: Uniswap V3 management platforms as collateral | $25k

  • RFP 8: Balancer V2 liquidity as collateral | $25k

  • RFP 9: Open source Compound Interface | $50k

  • RFP 10: Ripcord wallet | TBD

  • RFP 11: Governance/Voters rewards | TBD

  • RFP 12: cToken Cleanup | $250k

  • RFP 13: cToken Interest Rate Model Changes | $100k

  • RFP 14: Gas Savings for cToken and Comptroller contracts | $100k

  • RFP 15: Dynamic COMP reward distribution | $100k

  • RFP 16: Migrate legacy cTokens | $50k

  • RFP 17: Deploy upgradeable cETH contract and migrate users to it | $50k

  • RFP 18: Uniswap V3 liquidity as collateral | $100k

  • RFP 19: Interest rate curve research | $5k

  • RFP 20: Optimism Starport for Compound Gateway | $100k

Developer Community Call Recap

The Compound community held a Developer Community Call last week to discuss ongoing protocol and application development. You can access an audio recording of the call here

Markets Update

Current supply on Compound is at $18.5B from 297k unique addresses. 33% of this supply volume is ETH, 23% is DAI, and 21% is USDC. (source). 

Open borrowing is at $7.5B from 9.2k unique addresses. 43% of this borrowing volume is USDC, 42% is DAI, and 8% is USDT. (source). 

For live figures please refer to our Markets page

Image Source: IntoTheBlock

Links & Discussions

  • xDai introduces a new way to earn yield on bridged Dai using the Compound protocol, automatically supplying up to 21,000,000 DAI.

  • Several members of the Compound community shared presentations during the ETHOnline Compound Grants Summit. A replay of these presentations is available here.

  • Twitter user @0xTomoyo shares a well-written explanation of Compound’s liquidation mechanism.

Tweet of the Week 

 

Compound at ETHOnline, Governance Address Whitelisting, DAI Distribution

Compound Digest - September 17, 2021

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

Compound at ETHOnline Hackathon

The Compound Grants Program is sponsoring the upcoming ETHOnline hackathon, which runs from September 17th to October 15th. There will be $12k worth of bounties available to teams who build interesting applications on top of Compound, with $3k going to each winner of the categories below: 

  • Most innovative use of supplying to the protocol

  • Most innovative use of borrowing from the protocol

  • Best full-featured, open-source interface to the protocol

  • Prize pool (must implement the protocol)

You can view this kick-off presentation for inspiration on what to build, and be sure to stop by for a whole day of Compound summits on October 7th. We’re excited to see what you’ll build at the hackathon!

Governance Updates

Since the last newsletter, Proposals 59 and 60 both passed the voting stage with broad community support and are now queued. 

Completed Votes

Proposal 59: Distribute DAI to Users Affected in the DAI Liquidations

  • Status: Queued September 15th, 2021

  • Proposer: kybx86 (CAP)

  • Voting Results: 1,527,754 For and 30 Against

  • Summary: Proposal 59 distributes 6,817,798 DAI from the 16.4 million DAI market reserves to users who were affected by the DAI price spike to $1.30 on Coinbase Pro on November 26th, 2020. This distribution amount covers the 8% liquidation penalty on the 85,222,475 DAI that was repaid during the event. Users do not need to take any action to receive the DAI, as a relayer will claim and distribute the proceeds to each wallet address. For additional information on the November 2020 DAI liquidation event, you can read the original forum post and proposal forum post.

Proposal 60: Address Whitelist for Submitting Proposals

  • Status: Queued September 15th, 2021

  • Proposer: Polychain Capital

  • Voting Results: 1,093,837 For and 151,001 Against

  • Summary: Proposal 60 allows the community multisig to create a whitelist of contributor addresses that will be able to submit new governance proposals without the existing 65k COMP threshold. The proposed implementation creates a whitelistGuardian, initially set to the community multisig, that is able to add and remove approved whitelisted addresses, as well as cancel proposals from these addresses. Proponents argue that this will reduce the effort and time needed for repeat contributors to submit a governance proposal, ultimately allowing Compound to iterate and improve at a faster rate. Dissenting views by Dennison Bertram and Romain Figuereo highlight the long-tail risks of moving too much of the governance process off-chain and potentially allowing a “friend and family” monopoly to develop. The idea for the governance whitelist was initially proposed in a forum post by Jacob Phillips, with Arr00 leading the engineering effort on the codebase and simulation tests. 

Ongoing Discussions

See below for highlights from the Compound Community Forum, and join in the discussion:

  • Add Market: Matic - @LawSirrah provides an update that they deployed cMATIC to mainnet, but are getting an error message on gas fees.

  • Add Market: FEI - The community discusses adding FEI as a supported market and evaluates potential risks around the “guardian” multisig of the FEI governance system.

  • New Market Addition: Gemini dollar (GUSD) -- The Gemini team proposes listing GUSD on the compound protocol, and community members ask questions about the token’s liquidity and guardrails against fraudulent minting of new supply. 

  • Compound & Vesper: Compound Island -- The Vesper team requests a $100K COMP grant in order to fund development of a Compound protocol fork that will support a broader range of assets while still being governed by the COMP token. The goal is to allow Compound to iterate more rapidly without transferring the negative impact of risky assets back to the core Compound markets.

  • Compound Grants Program: Lessons and Next Steps - Larry Sukernik provides a recap on the accomplishments of the grants program, and outlines improvements for a new version yet to be launched.

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

Active RFPs

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!

  • RFP 1: Decentralized batching contract | $25k

  • RFP 2: Voting with COMP collateral | $50k

  • RFP 3: Bringing Compound to L2's and other chains | $50k

  • RFP 4: Adding support for new assets on Compound | $12.5k 

  • RFP 5: Gas optimizations | TBD

  • RFP 6: Improvements to the liquidations process | $50k

  • RFP 7: Uniswap V3 management platforms as collateral | $25k

  • RFP 8: Balancer V2 liquidity as collateral | $25k

  • RFP 9: Open source Compound Interface | $50k

  • RFP 10: Ripcord wallet | TBD

  • RFP 11: Governance/Voters rewards | TBD

  • RFP 12: cToken Cleanup | $250k

  • RFP 13: cToken Interest Rate Model Changes | $100k

  • RFP 14: Gas Savings for cToken and Comptroller contracts | $100k

  • RFP 15: Dynamic COMP reward distribution | $100k

  • RFP 16: Migrate legacy cTokens | $50k

  • RFP 17: Deploy upgradeable cETH contract and migrate users to it | $50k

  • RFP 18: Uniswap V3 liquidity as collateral | $100k

  • RFP 19: Interest rate curve research | $5k

  • RFP 20: Optimism Starport for Compound Gateway | $100k

Developer Community Call Recap

The Compound community held a Developer Community Call last week to discuss ongoing protocol and application development. You can access an audio recording of the call here

Markets Update

Current supply on Compound is at $19.3B from 295k unique addresses. 32% of this supply volume is ETH, 23% is USDC, and 35% is DAI. (source). 

Open borrowing is at $8.2B from 8.8k unique addresses. 43% of this borrowing volume is USDC, 41% is DAI, and 6% is USDT. (source). 

For live figures please refer to our Markets page

Image Source: IntoTheBlock

Links & Discussions

  • Compound Labs announces that it has open-sourced the code for the original app interface under the GPLv3 license, allowing the community to improve, maintain, or fork the front-end.

  • A16Z launches a Token Delegate Program where individuals and entities can apply for COMP delegations in order to participate in Compound governance.

  • KeyFi, a platform for tracking, swapping, and staking tokens, integrates Compound’s borrowing functionality into a new product launch.

  • The New York Times features Compound as an example of an innovative DeFi protocol challenging the status quo in traditional finance.  

Tweet of the Week

Grants Batch 5, Compound Treasury Expands Coverage, New Asset Collateral Factors

Compound Digest - August 20, 2021

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

Grants Batch 5 is Funded

The Compound Grants Program recently announced its fifth batch of funded grants. The Committee funded 7 additional projects for a total of ~$77k, bringing the total number of grants to 29 projects and total funding to ~$577k. A list of the newly funded projects is provided below.

Gas Optimizations

  • Applicant: Tyler Loewen

  • Grant Size: $10k

  • Description: Gas optimizations to the cToken and Comptroller contracts. Gas optimizations are incredibly important because they make Compound cheaper to use for all users.

Powerful Compound Dashboard

  • Applicant: Paperclip Labs

  • Grant Size: $20k

  • Description: As part of the second batch of grants, the Paperclip Labs team started work on an independent and open-source dashboard that shows a variety of data on Compound. The team is back to make this dashboard even more powerful. Based on input from the community, the team will add even more data sources to the dashboard.

Hardhat Plugin

  • Applicant: Archil Panchulidze

  • Grant Size: $6k

  • Description: Hardhat allows developers to easily debug code. Using this plugin, developers will be able to run/deploy Compound Protocol locally and use all hardhat features.

Compound Discord Bot

  • Applicant: Ah Kek

  • Grant Size: $1k

  • Description: The grant will go towards setting up a Discord bot that shows info like COMP price, stats, supply, and borrow. In addition, this bot will have commands to check one’s current liquidation risk and collateral ratio.

DAO Jobs Board

  • Applicant: Adrian Trustman, Aleks Larsen, Andreas Larsen, Derek Hsue, Gary Thung, Jon Yan, Kinjal Shah, Larry Sukernik, Margaux Paradis

  • Grant Size: $25k

  • Description: DAOs need contributors to work on them. Unfortunately, most contributors find working for DAOs daunting. This project will make an attempt to bring top talent to DAOs by creating an onboarding experience people are familiar with.

Interest Rate Curve Research

  • Applicant: Yash Patel

  • Grant Size: $5k

  • Description: Applicant seeks to complete an RFP to analyze data on Compound's interest rate curves. This report will include an analysis of the current parameters, recommendations for the interest rate curve.

Decentralized Governance Hackathon

  • Applicant: Boardroom x Gitcoin

  • Grant Size: $10k

  • Description: Co-sponsoring Gitcoin's Decentralized Governance Hackathon alongside Boardroom, UMA, Snapshot, Gnosis, and DAOhaus.

Compound Treasury Expands Coverage

Compound Treasury, a managed service for earning 4.00% APR on US Dollar balances powered by the Compound protocol, has expanded access to customers in California, New York, Florida, and Utah. With USD access, daily liquidity, and no fees, Compound Treasury provides the simplest experience for non-crypto native financial institutions to access the benefits of the Compound protocol.

If you’re an accredited institution in the states mentioned above, learn more on the Treasury website and get in touch with our team here!

Governance Updates

Since the last newsletter, Proposal 55 was canceled, Proposal 56 was executed, and Proposal 57 is in the review stage. 

Completed Votes

Proposal 55: Add Collateral Factors for MKR, SUSHI, AAVE, & YFI

Proposal 56: Add Collateral Factors for MKR, SUSHI, AAVE, YFI, & LINK

  • Status: Executed August 16th, 2021

  • Proposer: Getty Hill

  • Voting Results: 1,527,754 For and 30 Against

  • Summary: Proposal 56 updated the collateral factors of the newly added assets to the following values: MKR: 35%, SUSHI: 40%, AAVE: 50%, YFI: 35%, LINK: 50%. Asset collateral factors are crucial parameters for the safety of the entire protocol, and the community evaluated various metrics like market liquidity, concentration of holdings, and the number of supported exchange listings to arrive at these values. You can read this forum thread for the rationale behind LINK’s collateral factor, and this forum thread for the rationale behind the other assets. The community plans to add a compSpeed for these markets after a bug in the current implementation is resolved.

Proposal 57: Set Pause Guardian to Community Multi-Sig

  • Status: Review - 1 day, 3 hrs until voting

  • Proposer: Robert Leshner

  • Voting Results: NA

  • Summary: Proposal 57 transfers the Pause Guardian from Compound Labs to the Community Multisig that currently consists of @TennisBowling, @arr00, @blck, Compound Labs, Dharma Labs (@0age), and @jared. The Pause Guardian is a role designated by the Comptroller that allows an address to disable the Mint, Borrow, Transfer, and Liquidate functions of the Compound protocol, in the event of a vulnerability or exploit. Notably, the Pause guardian does not prevent users from calling the Redeem or repayBorrow functions, so that users can still exit the protocol at will. This action further decentralizes the protocol and ensures its long-term resiliency. 

Ongoing Discussions

See below for highlights from the Compound Community Forum, and join in the discussion:

  • Compound Finance COMP Rewards - @getty and @sukernik continue the discussion surrounding changes to the COMP reward mechanism.  In the coming weeks/months, there should be fleshed out plans regarding separate supply and borrow COMP rates, revamping the grants program, and subsidizing gas fees with COMP.

  • Add Market: SNX - @LawSirrah provides an update on efforts to add SNX as a supported market on Compound.

  • Compound governance is disorganized - @JacobPPhillips discusses the state of Compound governance and, alongside other active contributors, recommends some high-level solutions and ideas to consider.

  • Formal process for adding new collateral assets - @pyggie provides a framework for the community to evaluate adding new collateral assets.

  • Whitelist of addresses that can create proposals - @arr00’s work on creating a proposal generating whitelist of trusted community members continues with code upgrades and suggestions from the community.

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

Active RFPs

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!

  • RFP 1: Decentralized batching contract | $25k

  • RFP 2: Voting with COMP collateral | $50k

  • RFP 3: Bringing Compound to L2's and other chains | $50k

  • RFP 4: Adding support for new assets on Compound | $12.5k 

  • RFP 5: Gas optimizations | TBD

  • RFP 6: Improvements to the liquidations process | $50k

  • RFP 7: Uniswap V3 management platforms as collateral | $25k

  • RFP 8: Balancer V2 liquidity as collateral | $25k

  • RFP 9: Open source Compound Interface | $50k

  • RFP 10: Ripcord wallet | TBD

  • RFP 11: Governance/Voters rewards | TBD

  • RFP 12: cToken Cleanup | $250k

  • RFP 13: cToken Interest Rate Model Changes | $100k

  • RFP 14: Gas Savings for cToken and Comptroller contracts | $100k

  • RFP 15: Dynamic COMP reward distribution | $100k

  • RFP 16: Migrate legacy cTokens | $50k

  • RFP 17: Deploy upgradeable cETH contract and migrate users to it | $50k

  • RFP 18: Uniswap V3 liquidity as collateral | $100k

  • RFP 19: Interest rate curve research | $5k

  • RFP 20: Optimism Starport for Compound Gateway | $100k

Developer Community Call Recap

The Compound community held a Developer Community Call last week to discuss ongoing protocol and application development. You can also access an audio recording of the call here

Markets Update

Current supply on Compound is at $17.9B from 295k unique addresses. 28% of this supply volume is ETH, 27% is USDC, and 25% is DAI. (source). 

Open borrowing is at $7.9B from 8.8k unique addresses. 43% of this borrowing volume is USDC, 41% is DAI, and 6% is USDT. (source). 

For live figures please refer to our Markets page

Image Source: IntoTheBlock

Links & Discussions

  • Compound Labs CEO, Robert Leshner, joins the 11:FS Podcast to discuss the fundamentals and current trends in DeFi.

  • Compound Labs Business Development Associate, Nick Martitsch, joins a DeFi Conference 2021 panel to discuss institutional investment in DeFi.

  • RioDeFi integrated Compound’s interest rate markets into its wallet application.

  • Compound Labs General Counsel, Jake Chervinsky, joins the Bankless podcast to discuss the current state of DeFi regulation.

  • Compound community member Luca Prosperi provides a deep analysis on the financial primitives of the Compound protocol.

  • OpenFrontEnds offers a bounty for community members to build an open-source version of the Compound app interface.

Tweet of the Week

Zapper Integration, Hiding Vault Launch, MKR, AAVE, SUSHI, YFI Listing Proposals

Compound Digest - July 30, 2021

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

Earn Interest on Compound Through Zapper

Zapper, an all-in-one platform to manage, track, and invest in crypto, integrated the Compound protocol into its new save feature. While Zapper users could previously only track the value of their existing Compound positions, users can now supply any of the assets that the protocol supports to earn the prevailing interest rate. More details about the save feature are available in this help article.

Protect Against Liquidations with Hiding Vault

The KeeperDAO team recently announced the launch of Hiding Vaults, which provides borrowers with a new method to protect their positions from liquidation. Hiding Vaults are powered by a Just-In-Time-Underwriter (JITU) that adds additional collateral to at-risk borrowing positions, shielding them from the open ecosystem of liquidators. Borrowers can then add additional collateral or wait until the health of their position improves before borrowing further or withdrawing.

Hiding Vaults initially supports Compound, and will soon allow users to access multiple protocols from the same vault. Users will also receive ROOK, the governance token of the KeeperDAO ecosystem, as a reward for borrowing on the platform. There are currently $124m of assets being protected in 141 vaults, and should help onboard more users into DeFi borrowing. 

Governance Updates

Since the last newsletter, Proposals 53 and 54 are in the active voting stage. 

Completed Votes

Proposal 53: Add MKR Support

  • Status: Active - 1 day, 6 hrs left

  • Proposer: MonetSupply

  • Voting Results: 305,624 For and 0 Against

  • Summary: Proposal 53 adds MKR as the next supported asset on Compound. The proposed market would feature a 0% collateral factor, 25% reserve factor, JumpRateModelV2 interest rate model and a 25,000 MKR borrow cap to mitigate the risk of governance attacks. The proposal was originally created by Getty Hill and Eddy Lee and was submitted by MonetSupply. You can read more about the proposed market on the accompanying forum thread.

Proposal 54: Add AAVE, SUSHI, YFI

  • Status: Active - 2 days, 8 hrs left

  • Proposer: Polychain Capital

  • Voting Results: 224,858 For and 0 Against

  • Summary: Following up on Proposal 53, Proposal 54 adds AAVE, SUSHI, and YFI as supported assets on Compound. Each of these markets will feature a 25% reserve factor, 0% collateral factor, and JumpRateModelV2 interest rate model. The AAVE and YFI markets will have a 60,000 and 1,500 borrowing cap, respectively. These new listings showcase the flexibility of the new Chainlink price feed and the solid work from Getty Hill who received a COMP stream in order to manage new asset listings. You can read more about these proposed markets on the accompanying forum thread.

Ongoing Discussions

See below for highlights from the Compound Community Forum, and join in the discussion:

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

Active RFPs

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!

  • RFP 1: Decentralized batching contract | $25k

  • RFP 2: Voting with COMP collateral | $50k

  • RFP 3: Bringing Compound to L2's and other chains | $50k

  • RFP 4: Adding support for new assets on Compound | $12.5k 

  • RFP 5: Gas optimizations | TBD

  • RFP 6: Improvements to the liquidations process | $50k

  • RFP 7: Uniswap V3 management platforms as collateral | $25k

  • RFP 8: Balancer V2 liquidity as collateral | $25k

  • RFP 9: Open source Compound Interface | $50k

  • RFP 10: Polygon Starport for Compound Gateway | $100k

  • RFP 11: Ripcord wallet | TBD

  • RFP 12: Governance/Voters rewards | TBD

  • RFP 13: cToken Cleanup | $250k

  • RFP 14: cToken Interest Rate Model Changes | $100k

  • RFP 15: Gas Savings for cToken and Comptroller contracts | $100k

  • RFP 16: Dynamic COMP reward distribution | $100k

  • RFP 17: Migrate legacy cTokens | $50k

  • RFP 18: Deploy upgradeable cETH contract and migrate users to it | $50k

  • RFP 19: Uniswap V3 liquidity as collateral | $100k

  • RFP 20: Interest rate curve research | $5k

  • RFP 21: Optimism Starport for Compound Gateway | $100k

Developer Community Call Recap

The Compound community held a Developer Community Call on Wednesday to discuss ongoing protocol and application development. You can also access an audio recording of the call here

Markets Update

Current supply on Compound is at $16.1B from 294k unique addresses. 31% of this supply volume is USDC, 29% is DAI, and 22% is ETH. (source). 

Open borrowing is at $7.6B from 8.4k unique addresses. 46% of this borrowing volume is DAI, 40% is USDC, and 7% is USDT. (source). 

For live figures please refer to our Markets page

Image Source: IntoTheBlock

Links & Discussions

  • Sense Finance published a blog post on separating Compound’s cTokens into separate principal and yield tokens.

  • Compound Labs CEO, Robert Leshner, speaks about real-world use cases of the Compound protocol at the SCB10x Virtual DeFi Summit.

  • Fortune Magazine published an article about DeFi protocols like Compound taking on the incumbent financial system.

  • Tearsheet covers the launch and features of Compound Treasury.

Tweet of the Week

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