Discussing DeFi innovation with S&P Global on Compound Thesis
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Assessing the DeFi Markets with S&P on Compound Thesis
In the latest episode of Compound Thesis, we hosted Chuck Mounts, Chief DeFi Officer and Charles Jansen, Head of DeFi Transformation at S&P Global to discuss how innovations in DeFi could transform the global financial structure.
“One of the obvious things that everybody sees… is well, the fact that the settlement is instantaneous… There are also tokenization of everything aspect and the fractionalization of this asset and also derivatives that can be done of that. And all of that will be 24/7.”
Charles Jansen, Head of DeFi Transformation, S&P Global
“I break it down to thinking about back office functions versus front office functions… the promise of blockchain, digital assets, crypto, DeFi …to make the back office and market functioning more efficient and as a result reduce risk and bring down costs…
But I think actually the bigger disruption risk is probably from the front office. And that is how does DeFi and Web3 create, enable the creation of new kinds of capital pools, and access to those capital pools from a new set of borrowers… that is actually transformational.”
Chuck Mounts, Chief DeFi Officer, S&P Global
Watch S&P’s full replay here.
Be sure to watch our next episode to learn how Gauntlet manages and models risk for the top DeFi protocols - click “attend” to join us live or be notified for the full recording on LinkedIn.
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Protocol Governance Updates
Summarized below are highlighted proposals since our last newsletter - find all proposals at https://compound.finance/governance.
Recent Proposals
Proposal 132 - Liquidation Event Handling And Collateral Reserves
Status: Active
Proposer: Compound Labs
Summary: Shortly after the first Compound III market launched, a community developer noticed that the absorb function was missing an event log in the case when an account is left with a positive balance. While this doesn’t have any economic impact, adding this event log will improve the user experience on Etherscan and blockchain explorers, and make analytics easier. We have crafted a patch and created a migration script to create a proposal in this pull request.
The associated forum post for this proposal can be found here.
Proposal 131 - Pause Supply for Compound Assets
Status: Executed October 24, 2022
Proposer: Gauntlet
Voting Results: 554,125 For and 1 Against
Summary: A proposal to pause supply for ZRX, BAT, MKR, and YFI on Compound III. An oracle manipulation-based attack analogous to the one that cost Mango Markets $117m is much less likely to occur on Compound due to collateral assets having much deeper liquidity than MNGO and Compound requiring loans to be over-collateralized. However, out of an abundance of caution, we propose pausing supply for the above assets, given their relative liquidity profiles. Details are provided in the governance forum post.
Proposal 130 - Adjust cCOMP and cUNI Parameters
Status: Executed October 24, 2022
Proposer: MonetSupply
Voting Results: 585,262 For and 0 Against
Summary: This proposal makes changes to the cCOMP and cUNI markets. The borrow cap for cCOMP is increased from 90,750 to 150,000 COMP, and the cCOMP interest rate model is switched to the rate model currently in use for cUNI, resulting in slightly higher borrowing costs across the utilization curve. The rate model for cUNI is switched to the rate model currently in use for cAAVE/cMKR/cYFI/cSUSHI, normalizing it with other similar assets and resulting in slightly lower borrowing costs across the utilization curve. See discussion in the forum for more details.
Proposal 129 - Risk Parameter Changes for FEI: Part 2
Status: Executed October 16, 2022
Proposer: Gauntlet
Voting Results: 560,290 For and 0 Against
Summary: A proposal to adjust risk parameters for FEI as follows: Pause cFEI minting; Set reserve factor to 100%. Details are provided in the governance forum posts regarding FEI.
Proposal 128 - Increase Compound III Supply Caps
Status: Executed October 8, 2022
Proposer: Gauntlet
Voting Results: 539,589 For and 0 Against
Summary: This proposal begins raising collateral supply caps, so that Compound III can continue expanding past its trial phase. The changes are specified on the governance forum and summarized below: 75,000 ETH, 6,000 WBTC, 600,000 COMP.
Proposal 126 - OpenZeppelin Security Partnership - 2022 Q4 Adjustment
Status: Executed September 30, 2022
Proposer: OpenZeppelin
Voting Results: 547,898 For and 0 Against
Summary: As discussed for the Q3 proposal, we will receive our quarterly payment in a lump-sum. Based on the last week's average price, this would be $57 per COMP for a total quarterly payment of 17,544 COMP equaling $1M per the original agreement. This COMP will be transferred from the Timelock's existing balance. More detail in this forum post.
Ongoing Discussions
See all the latest discussions on the Compound Community Forum.
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.