Compound Extensions are now live
Highlighting the best of the Compound ecosystem. For more updates, join the Compound community on Discord, Twitter, LinkedIn and Comp.xyz.
Introducing Compound Extensions
Starting today, users of the Compound interface have access to a new feature: Extensions. Extensions are optional add-ons, built by community developers, that enhance the Compound experience.
When you enable an extension, it can leverage Compound III’s new account management functionality to add new features to your account–such as automation, composability with other DeFi protocols, or position management. Or, it can run without requiring any permissions, and simply provide information–such as liquidation alerts.
This is an experimental, entirely new approach to the DeFi user experience, and opens up a new frontier for community developers.
Read the full Compound Extensions announcement and join the discussion here.
Compound In the News
The Economist - A crypto-exchange founder makes his case for decentralised finance
The Defiant - Compound Caps Borrowing Levels for 10 Assets to Reduce Risk
AIThority - MakerDAO Brings DAI Direct Deposit Module (D3M) to Compound
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Why Fidelity International believes blockchain will transform global finance - on Compound Thesis
Our guest is Luc Froehlich, Global Head of Digital Assets Solutions at Fidelity International. Fidelity International, with over $600B in AUM, provides investment solutions, advisory, custody, trading services across equities, fixed income, mutual funds and digital assets to clients across 25 countries.
We'll be discussing why Fidelity International believes blockchain will transform global finance, the major pain points it can address, and how it might change the way major institutions operate.
Click “attend” to join us live or be notified for the full recording on LinkedIn.
Protocol Governance Updates
Summarized below are highlighted proposals since our last newsletter - find all proposals at https://compound.finance/governance.
Proposal 137 - Increase WETH Supply Cap in cUSDCv3
Status: Executed December 7, 2022
Proposer: Compound Labs
Voting Results: 487,559 For and 0 Against
Summary: The first action of the proposal sets the configurator supply cap for WETH to 150,000, twice the current cap of 75,000. The second action deploys and upgrades to a new implementation of Comet, using the newly configured parameters.
The cUSDCv3 market is currently limited by the WETH supply cap, which has been reached. Since setting these caps (in units of each collateral asset), prices of collateral assets have decreased, effectively lowering the current caps, while usage has grown. The associated forum post for this proposal can be found here.
Proposal 136 - CGP 2.0 by Questbook
Status: Executed December 4, 2022
Voting Results: 593,227 For and 2 Against
Summary: A community-run grants program for Compound using delegated domain allocation. We propose a Compound Grants Fund of $800K USD (22087.24 COMP), spread across 2 quarters, to find and fund a wide variety of teams building on Compound. We also propose $200K USD (5521.81 COMP) to compensate the grants committee for running the program.
Proposal 135 - Borrow Caps for Compound V2 Assets
Status: Executed November 30, 2022
Voting Results: 470,137 For and 50,001 Against
Summary: A proposal to adjust ten (10) risk parameters (borrow caps) for ten (10) Compound V2 assets. Full proposal and forum discussion.
Proposal 133 - Risk Parameter Updates for 1 Collateral Asset
Status: Executed November 6, 2022
Voting Results: 487,542 For and 50,001 Against
Summary: We recommend decreasing SUSHI collateral factor from 73% to 70%. The community has aligned on a risk off framework. Full proposal and forum discussion.
See all the latest discussions on the Compound Community Forum - highlighted proposals below.
Upgrade Compound II’s Oracle to UAV3
Summary: This proposal is to upgrade the Compound II UniswapAnchoredView (UAV) Oracle. The upgrade will update the UAV’s reference prices from Uniswap V2 pools to Uniswap V3 pools. A significant amount of liquidity on Uniswap V2 has shifted towards Uniswap V3 as liquidity providers capitalize on concentrated liquidity provisioning strategies; upgrading the oracle will provide higher reliability and security assurances by reducing the risk of price manipulation or other issues related to low liquidity.
Summary: A partial list of maintenance tasks which could be addressed by one or more governance proposals. While these might be low-impact or invisible to users, it would be good governance hygiene to address and update concerning: Deprecated Markets, Current Markets, Comptroller & Timelock and Block Speeds.
Compound V3 USDC Market: Risk Parameter Updates 2022-12-01
Summary: Based on Gauntlet’s simulation results as of 2022-11-30, decreasing COMP liquidation factor from 93% to 88% reduces Value at Risk (VaR) for COMP (showed in blue below) from $5.6m to $4.5m, a ~20% decrease. This reduction is reflected by the increase in the amount of COMP purchased by liquidators in simulation results.
We’d note that VaR here refers to the amount of collateral that has been absorbed by Comet but not purchased by liquidators. In other words, the VaR calculation refers to the value of absorbed collateral that is sitting on Comet’s balance sheet and is subject to pricing risk. This definition of VaR is slightly different from the definition of VaR for Compound V2 in order to align specifically with Comet’s new liquidation mechanism.
As a reminder, one of the best ways to participate in, and contribute to the Compound ecosystem is completing outstanding Request For Proposals (RFPs)
Click here for a recap of our most recent Developer Community Call, discussing ongoing protocol and application development, and listen to the audio recording here.