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

Compound Treasury Launch, Circle DeFi API, Grants Batch 4, Governance Updates

Compound Digest - July 9, 2021

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

Compound Treasury Launch

Last week, Compound Labs announced the launch of Compound Treasury, a new service designed for non-crypto native businesses and financial institutions to access the benefits of the Compound protocol. 

Working with Fireblocks and Circle, Compound Treasury has built a product and flow-of-funds that enables Neobanks, Fintech startups, and other large holders of U.S. Dollars to access the interest rates available in the USDC market of the Compound protocol, while abstracting away protocol-related complexity including private key management, crypto-to-fiat conversion, and interest rate volatility. The customer experience is simple:

  • Wire U.S. Dollars to your Compound Treasury Account, and begin earning a guaranteed, fixed interest rate of 4% per year — orders of magnitude higher than the average U.S. Dollar Savings Account.

  • Fund and withdraw from your account anytime, with a 24-hour turnaround.

  • Low minimums, no maximums, and no fixed terms or durations.

  • Detailed, auditable balance statements available monthly and on-demand.

Since the launch, Treasury has received an overwhelming response from the fintech and crypto communities. You can read analysis on the launch from publications like Net Interest, Fintech Brain Food, The Defiant, Coindesk, The Block, and Yahoo News

Compound Treasury is currently onboarding California-based businesses that are looking to earn 4.00% APR on a minimum balance of $100k, and will be expanding access to broader geographies in the coming months. If this describes your business and intended use case, please fill out this form to join the waitlist. We look forward to hearing what you’ll build with Compound Treasury!

Circle DeFi API

Circle announced the upcoming launch of a DeFi API, which will connect Circle accounts to the ecosystem of decentralized interest rate protocols, starting with Compound. Users will soon be able to automate flows of USDC into Compound directly from Circle’s secure financial infrastructure, in order to seamlessly integrate DeFi-powered interest rates into their business.

USDC remains one of the most popular markets on the Compound protocol, with $3.2B of outstanding supply volume and $1.7B of borrow volume, and tools like the DeFi API will further cement USDC as an onramp for institutional involvement in DeFi.

Interested businesses can join the waitlist for the DeFi API here.

Compound Grants Batch 4

The Compound Grants Program recently announced its fourth batch of funded grants. The Committee funded 5 additional projects for a total of ~$170k, bringing the total number of grants to 22 projects and total funding to ~$500k. A list of the newly funded projects is provided below.

Approved Grants

Infrastructure as a Service for Gateway

  • Applicant: OnFinality

  • Grant Size: $8.4k

  • Description: OnFinality is looking to become the "Infura of Polkadot." As part of that mission, the team applied for a grant to run nodes for Compound Gateway.

DAO Legal Cooperative

  • Applicant: Connor Spelliscy

  • Grant Size: $25k

  • Description: Connor is a former lawyer with a strong interest in DAOs. In collaboration with Uniswap and Aave grants, Compound grants is funding Connor's legal research into DAOs for the community to better understand their legal status. 

ETH Global "Hack Money" hackathon

  • Applicant: ETH Global

  • Grant Size: $37k

  • Description: In the last batch of grants, the grants team thought they would sponsor Hack Money on the lower, $10k sponsor tier. After further thought, the team decided to become a top-tier sponsor ($35k). They also carved out $12k for hackathon bounties and prizes.

Messari Integration

  • Applicant: Messari

  • Grant Size: $50k

  • Description: Messari publishes research catered to an audience of institutional investors. As part of the grant, Compound will be integrated into Messari's research portal. Messari will also publish (4) in-depth research reports on Compound, explaining the project to institutional investors.

Rabbithole Integration

  • Applicant: Rabbithole

  • Grant Size: $50k

  • Description: Rabbithole sends users on "protocol quests" with the goal of increasing usage and developments for projects. As part of this grant, Rabbithole wants to send users on quests to supply and borrow assets on Compound. In the future, Rabbithole will send its users on more complex quests (e.g., protocol improvements).

Governance Updates

Since the last newsletter, Proposals 49 and 50 passed through the governance system with unanimous support from the community and Proposals 51 and 52 are in the active voting stage.

Completed Votes

Proposal 49: Update and Standardize cToken Implementation

  • Status: Executed June 28th, 2021

  • Proposer: Geoffrey Hayes

  • Voting Results: 1,129,591 For and 0 Against

  • Summary: Proposal 49 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 49 was originally submitted as proposal 48, which was canceled during the review period when the community member pyggie noticed a potential improvement to transaction event logs. Proposal 49 also includes a bounty of 30 COMP to pyggie for their contribution. You can read more about this proposal on the original forum thread.

Proposal 50: Close Deprecated Markets, Gas Savings

  • Status: Executed July 6th, 2021

  • Proposer: Geoffrey Hayes

  • Voting Results: 1,521,855 For and 0 Against

  • Summary: Proposal 50 adds two updates to the current Comptroller implementation. The first update is a more gas-efficient claimComp function that combines rewards across multiple markets into the same transfer. The second update allows markets with a 0% Collateral Factor, 100% Reserve Factor, and Borrowing Paused to be completely liquidated, in order to more effectively deprecate legacy markets like SAI and REP. You can read more about this proposal on the original forum thread.

Proposal 51: Contributor Grant: Getty Hill

  • Status: Active - 2 days, 18 hrs left

  • Proposer: Robert Leshner

  • Voting Results: 175,000 For and 0 Against

  • Summary: Proposal 51 sets a 0.000214 Contributor COMP Speed grant from the protocol to Getty Hill, for his work on the Chainlink price feed mechanism that was implemented through Proposal 47. As Getty describes in the original forum post, the grant will also cover the ongoing work that he will do to monitor the safety of the price feed, research efficiency improvements, and assist in adding support for new assets. The grant will run until otherwise modified by governance. This is the first instance of a streaming COMP grant and serves as a great example for developers and project managers looking to contribute to the protocol and get rewarded for their hard work.

Proposal 52: Lower Proposal Threshold to 65,000 COMP

  • Status: Active - 2 days, 22 hrs left

  • Proposer: Polychain Capital

  • Voting Results: 105,102 For and 0 Against

  • Summary: Proposal 52 would lower the proposal creation threshold from 100,000 COMP to 65,000 COMP. The lower threshold amount makes it easier for community members to navigate the Compound Autonomous Proposal (CAP) process, which can be created with 100 COMP and set to a live vote after reaching the threshold. This parameter change also highlights the flexibility of Governor Bravo, which allows the community to tweak individual features of the governance system without replacing the entire system. You can read more about the rationale behind the lower threshold amount on the forum thread, originally posted by Arr00.

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 | $25k

  • RFP 3: Bringing Compound to L2's and other chains | $25k+

  • 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 liquidity as collateral | $12.5k

  • RFP 8: Balancer V2 liquidity as collateral | $12.5k

  • RFP 9: Open source Compound Interface | $10k+

  • RFP 10: Polygon Starport for Compound Gateway | $15k+

  • 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 distribution | $100k

  • RFP 17: Migrate legacy cTokens | $100k

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

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 $11.4B from 293k unique addresses. 29% of this supply volume is USDC, 27% is DAI, and 22% is ETH. (source). 

Open borrowing is at $4.7B from 8.4k unique addresses. 42% 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

  • Dragonfly Capital's Tom Schmidt joins Bloomberg TV to discuss the fundamental innovations behind DeFi protocols like Compound.

  • Backd, a protocol for liquidation protection of LP tokens, announced that it will integrate with Compound at launch.

  • Pendle, a protocol for hedging future yield, launched new cDAI pools with shorter expiries of 30 Dec 2021.

  • Compound Labs CEO, Robert Leshner, joins the Bankless podcast to discuss the launch of Compound Treasury.

  • Techcrunch reports on Circle’s upcoming integration with the Compound protocol.

Tweet of the Week

HackMoney Hackathon, Pendle Launches, Chainlink Price Feed Proposal, cToken Standardization

Compound Digest - June 17, 2021

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

HackMoney Hackathon 

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.

Governance Updates

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

Proposal 47: Oracle Improvement

  • 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.

Proposal 48: Update and Standardize cToken Implementation

  • 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. 

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!

  • Gasless Supply/Redeem

  • Voting with COMP collateral

  • Bringing Compound to L2's and other chains

  • Adding support for new assets on Compound

  • Gas optimizations

  • Improvements to the liquidations process

  • Uniswap V3 liquidity as collateral

  • Balancer V2 liquidity as collateral

  • Open source Compound Interface

  • Polygon Starport for Compound Gateway

  • Ripcord wallet

  • Governance/Voters rewards

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 $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. 

Tweet of the Week

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