Compound Treasury launches Borrowing for Institutions
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Institutions can now borrow from Compound Treasury
Last year, Compound Treasury launched an institutional cash management solution powered by the Compound Protocol, offering a 4.00% APR on USD and USDC with daily liquidity. Starting today, to meet the growing demand for liquidity, institutions can now borrow from Compound Treasury, using digital assets as collateral.
Accredited institutions can borrow USD or USDC with fixed rates starting at 6% APR, using Bitcoin, Ether, and supported ERC-20 assets as collateral.
Borrowing is offered with an open-ended term and no repayment schedule, providing our clients the flexibility to draw liquidity and repay balances as they see fit–for as long as they remain overcollateralized.
Liquidity is provided by Compound Treasury clients and the Compound Protocol. Collateral never leaves Compound Treasury’s control, increasing transparency and the safety of funds for our clients.
Read the full Compound Treasury Borrowing announcement here.
Compound In the News
The Block - Compound Treasury debuts crypto-backed loans for institutional clients
BTIG Cryptoasset Currents - Compound Treasury’s Collateralized Crypto Lending Solution Poised to Meet Institutions Unmet Demand for Liquidity (login required)
Digital Asset Summit Recap; meet us at Circle Converge
The Compound Team will be at Circle Converge in SF from Sep 27 - Sep 30 - let us know if you’ll be in town and would like to meet.
Earlier this month at Blockworks’ Digital Asset Summit NYC, Robert Leshner spoke on a panel alongside Copper, Algorand, and dYdX about the “Next Gen Financial Primitives” within digital assets.
"Whether it's CeFi or DeFi, it’s just finance… The biggest difference is DeFi is the foundation of finance being run on an open transparent autonomous system, and CeFi being run by spreadsheets and people in back offices, middle offices, and front offices.
These two things are converging very rapidly, into just finance conducted in different ways. And eventually we’re going to stop calling it DeFi, we’re just gonna say it’s finance and it runs way better using a blockchain than it does with spreadsheets and people…
10 years from now, we’re gonna say it’s just all finance."
Robert Leshner, CEO & Founder, Compound Labs
Protocol Governance Updates
Summarized below are highlighted proposals since our last newsletter - find all proposals at https://compound.finance/governance.
Recent Proposals
Proposal 125 - Gauntlet <> Compound Renewal
Status: Executed September 25, 2022
Proposer: Gauntlet
Voting Results: 1,042,898 For and 0 Against
Summary: A proposal to renew Gauntlet’s 12-month engagement with Compound on continuous market risk management to maximize capital efficiency while minimizing the risk of insolvency and liquidations to create long-term sustainable growth.
To increase its alignment with Compound, Gauntlet will refund a portion of the payment should Gauntlet's risk parameter optimizations incur losses for the protocol during the engagement. For more details, see the full proposal.
Proposal 124 - Initialize Compound III COMP Distribution
Status: Executed September 10, 2022
Proposer: 0xc66e...68a9
Voting Results: 883,581 For and 0 Against
Summary: This proposal includes Compound III users in the COMP Distribution, which is accomplished by re-allocating 161.42 COMP per day (14.17% of the total) from v2 markets. The total COMP Distribution is unchanged by this proposal.
Full proposal and forum discussion.
Proposal 123 - Risk Parameter Changes for FEI
Status: Executed September 10, 2022
Proposer: Gauntlet
Voting Results: 1,052,153 For and 0 Against
Summary: A proposal to adjust risk parameters for FEI as follows: Pause FEI borrowing; and Set reserve factor to 99%.
In light of Tribe DAO’s proposal to enter a terminal state, the FEI market on Compound should be deprecated. Pausing FEI borrowing and setting a high reserve factor is the first step in winding down the FEI market.Details are provided in the governance forum posts regarding FEI.
Proposal 122 - cETH Risk Mitigation
Status: Executed September 9, 2022
Proposer: monet-supply
Voting Results: 914,647 For and 0 Against
Summary: Several changes to the cETH market on Compound v2 in preparation for the upcoming Ethereum merge and switch to POS consensus. This includes setting a borrow cap of 100,000 ETH, as well as updating the interest rate model to a jump rate model with much higher rates after exceeding 80% borrow utilization, up to a maximum of 1000% APR at 100% utilization.
See the forum discussion for further details.
Ongoing Discussions
See all the latest discussions on the Compound Community Forum - highlighted proposals below.
Proposal: Compound Grants Program 2.0 - Delegated Domain Allocation
Proposer: harsha
Summary: We propose a Compound Ecosystem Fund should be launched to find and fund a wide variety of teams building on Compound. We propose a budget of $1.5M spread across 2 quarters. We are open to iterating this budget amount based on the response from the community.
We additionally propose this budget be managed by 5 individuals - each managing $300K (domain allocator). End of every quarter the Compound community can come together to vote to replace, continue or increase budgets to each domain allocator.
Proposal: Normalize ETH Market Post Merge
Proposer: pauljlei
Summary: Proposal 122 has been passed to mitigate risk in the ETH market ahead of the Ethereum Merge. ETH borrowing demand is currently low on Compound - as such, there is limited downside for keeping Proposal 122’s borrow cap under current market conditions.
As for the interest rate curves, it would be prudent to revert the interest rate changes when ETH utilization is back to a healthy state. As market conditions evolve up to and after the merge, we will provide more details on the recommended precautions the community should take ahead of reverting any parameter changes from Proposal 122.
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.