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.

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