BTC Flexible Leverage Index, Grants Committee Funds Batch 3, Dashboard Contest Winners

Compound Digest - May 13, 2021

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

BTC Flexible Leverage Index

Index Coop and DeFi Pulse launched the Bitcoin 2x Leverage Index (BTC2x-FLI), providing holders with a 2x exposure target for BTC. Built on top of Set Protocol and Compound’s WBTC and USDC markets, these ERC20 tokens simplify the process of obtaining and managing leveraged positions with a one-click buying experience and automatic rebalancing to avoid liquidations.

This launch follows the initial Ethereum 2x Leverage Index product and highlights the power of composability in decentralized finance. You can read more about the underlying mechanics of the leveraged index on the DeFi Pulse and Index Coop announcements posts.

Grants Committee Funds Batch 3

The Compound Grants Program recently announced its third batch of funded grants. The Committee funded 7 additional projects for a total of ~$175k, bringing the total number of grants to 20 projects and total funding to ~$461k. A list of the newly funded projects is provided below.

Approved Grants

Account Health Notifications

  • Applicant: Patrick Ho

  • Grant Size: $38.4k

  • Description: Website that lets users opt-in to receive notifications that warn them when they're close to being liquidated (text/email).

Subgraphs from Compound Ecosystem

  • Applicant: Tally

  • Grant Size: $12k

  • Description: Subgraphs make it easy to query on-chain data for Compound. Tally is building subgraphs that bring data for Governor Alpha and Bravo, COMP token, Timelock, and autonomous proposals.

Research on retroactive COMP distribution

  • Applicant: @allthecolors

  • Grant Size: $10k

  • Description: Early users of Compound did not receive any COMP as part of a retroactive distribution. "Allthecolors" is an experienced data analyst who will provide the community with data on early Compound users and propose a fair retroactive distribution.

Code423n4 "Gas Optimization" Bounty

  • Applicant: Code423n4

  • Grant Size: $50-100k

  • Description: Code423n4 is a unique program that attracts top hackers to hack on bounties. We allocated funds to sponsor a bounty program aimed at gas optimizations for Compound.

DeFi NFTs

  • Applicant: Charged Particles

  • Grant Size: $15k

  • Description: Charged Particles combines NFTs with DeFi in a cool way. Here's how it works: you mint an NFT that can hold tokens, and then you deposit tokens into the NFT. Those tokens are then lent out on money markets to earn yield. This grant was provided to integrate Charged Particles with Compound money markets.

Adding LINK market to Compound

  • Applicant: Tyler Loewen

  • Grant Size: $12.5k

  • Description: Currently, no LINK market exists on Compound. Tyler created a forum thread proposing to add LINK to Compound.

ETH Global "Hack Money" hackathon

  • Applicant: ETH Global

  • Grant Size: $10k

  • Description: Sponsoring ETH Global's DeFi hackathon.

The grants program also has a number of outstanding Request for Proposals (RFPs), which are specific development tasks that can be rewarded with a grant. The RFPs listed below are a great way to contribute to the Compound ecosystem and get paid for doing it! We’re excited to see talented individuals and organizations build full-time careers around decentralized protocol development, and want to hear your feedback and ideas in the Grants Discord Channel.

Active RFPs

  • Voting with COMP collateral - Add the ability to vote with COMP that is locked as collateral in various DeFi protocols.

  • Bringing Compound to L2's and other chains - Bring Compound to L2's (e.g., Optimism, Polygon), in addition to other L1's.

  • Adding support for new assets on Compound - Compound supports nine markets today: USDC, USDT, COMP, UNI, ZRX, WBTC, ETH, DAI, and BAT. The Grants Committee would like to fund proposals that add new markets to Compound.

  • Gas optimizations - Develop various gas-saving measures that benefit all Compound users.

  • Improvements to the liquidations process - Check out this forum thread for more details on possible improvements to Compound’s liquidation system.

  • Uniswap V3 liquidity as collateral - The grants program would like to support researchers and builders who find solutions for supporting Uniswap V3 LP tokens as collateral.

  • Balancer V2 liquidity as collateral - Adding support for Balancer V2 tokens would be a great way to learn more about Balancer and Compound. To learn more, check out their Medium article.

  • Open source Compound Interface - Develop a community-built and maintained interface for the protocol.

  • Polygon Starport for Compound Gateway - With the success of Polygon and the fact it is EVM compatible, the grants program thinks Polygon is a great place for a Starport. To learn more about Compound Gateway, check the website.

  • Ripcord wallet - The Compound Grants would like to see a smart contract that can execute any code, similar to a Gnosis Multisig, but has one primary owner and one backup owner.

  • Governance/Voters rewards - Implement rewards for voters who vote yes, abstain, or no. While the grants program will cover the development, the funding for the rewards should come through the regular governance process.

Dashboard Contest Winners

The Compound Grants Program collaborated with Our Network to sponsor a dashboard contest, where contestants were invited to produce a public dashboard that contains 6+ data points on the health of the Compound network. The program received 16 applications, showcasing some of the best on-chain analytics in DeFi. The top 3 winners of the contest received a $5k grant, and all other applicants were rewarded with a $250 grant. A list of the winners and applications is provided below.

Governance Updates

Since the last newsletter, Proposal 44 passed through the governance system with unanimous support from the community.

Completed Votes

Proposal 44: Legacy market maintenance: WBTC and REP

  • Status: Executed May 4th, 2021

  • Proposer: blck

  • Voting Results: 868,928 For and 0 Against

  • Summary: Proposal 44 continues the process of migrating WBTC to a modern upgradable cToken contract by setting the reserve factor of the legacy WBTC market to 100%, effectively removing the supply interest rate. The WBTC migration has gone smoothly thus far, with the new market at $2.2B of supply and the legacy market at $277M of supply. This proposal also completes the deprecation of REP, by lowering its collateral factor to 0%. You can read more about the legacy cToken migration process on the accompanying forum post.

CAPs

TylerEther recently created a CAP to add Link as the next supported asset on Compound. The proposal would create a Link market with a 0% collateral factor, 25% reserve factor, 2% APY borrow base rate, JumpRateModelV2 interest rate model, and 0.0014625 COMP speed (same as UNI, BAT, and ZRX). Read the accompanying forum post for more information on the CAP, and consider delegating your support to 0xb3768415df87eba2d2019e89f9a31bbb313f8c7b.

Ongoing Discussions

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

  • Lower Proposal Threshold - The community discusses lowering the proposal threshold to either 65k or 50k COMP.

  • Compound Free Public Infrastructure by OnFinality -  The OnFinality team proposes a grant to fund a network of shared Compound Gateway public nodes on the OnFinality API.

  • Lego DAO – promoting Compound’s governance standards - m0zrat introduces Lego DAO, a group that focuses on promoting well-aligned governance frameworks.

  • stETH Listing Proposal - The community discusses adding stETH as a supported market on Compound. stETH represents ETH that has been pooled and staked onto Ethereum 2.0’s beacon chain with node operators selected by the Lido DAO.

  • Supporting the Compound Ecosystem - Leighton Cusack proposes that Compound governance loans $10M of USDC to a PoolTogether prize pool. The funds would be deposited into PoolTogether savings pools that contribute interest to the savings prizes but are not eligible to be won.

  • Compound LitQuidity - @Massnomis provides additional details on a plan to bootstrap liquidity for projects that integrate the Compound protocol.

  • Safety and Gas Patches - @maxcwolff discusses the in-progress development of patches to the Comptroller and CToken contracts to increase gas efficiency and overall security.

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

Developer Community Call Recap

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

Markets Update

Current supply on Compound is at $19B from 289k unique addresses. 31% of this supply volume is ETH, 25% is DAI, and 21% is DAI. (source). 

Open borrowing is at $8.7B from 8.1k unique addresses. 45% of this borrowing volume is DAI, 40% is USDC, and 6% is USDT. (source). 

For live figures please refer to our Markets page

Image Source: IntoTheBlock

Links & Discussions

  • David Mihal launched CryptoFees 2.0, which shows the current and historical fees paid by users of various DeFi protocols like Compound.

  • Bitcoin Suisse published a summary of the Compound protocol.

  • Messari published a deep dive on Gateway and the potential of cross-chain interest rate marketplaces.

  • In the Q4 2020 Ethereum DeFi Report, Consensys analyzes the impact of new tranche lending products built on interest rate protocols like Compound. 

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