Gauntlet Risk Management Dashboard, Coinbase Earn COMP Update, Governance Updates

Compound Digest - November 12, 2021

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

Gauntlet Risk Management Dashboard

The Gauntlet team recently launched the full version of the Compound Risk Management Dashboard as a part of their ongoing initiative to optimize yield, capital efficiency, and mitigate depositor losses on the Compound protocol. The dashboard shows the data and rationale behind Gauntlet’s dynamic risk parameters and contains the following sections:

  • Gauntlet Top Recommendations: Shows suggested changes to help optimize Capital Efficiency and Value at Risk.

  • Value At Risk: Shows capital at risk due to insolvencies and liquidations when markets are under duress, broken down by collateral type.

  • Borrow Usage: Shows the percentage of borrowing power that borrowers are currently utilizing.

  • Collateral Risk: Shows the risk for each collateral type in Compound.

The Gauntlet team is looking for community feedback on the dashboard, so feel free to add your comments to the forum thread or through the “Send Feedback” button on the interface. 

Coinbase Earn COMP Update

In September of 2020, the Compound Labs Team provided an update on the distribution of COMP tokens to the community, which included up to 500,000 COMP designated to Coinbase Earn. The Coinbase Earn program walked users through the process of supplying USDC to Compound and rewarded them with COMP for learning about the basic protocol mechanics. More than 5 million people learned about the Compound protocol through these videos and a Coinbase Wallet onboarding lesson.

The Earn program has since concluded, and Coinbase has transferred 114,100 COMP, 5,426 ETH, and 1,319,371 USDC to the Timelock. The community can use these assets to fund other initiatives that advance governance and benefit the Compound ecosystem.  

Governance Updates

Since the last newsletter, Proposal 66 passed through the governance system with broad community support, Proposal 67 failed, Proposal 68 is queued, and Proposal 69 is in the active voting stage. 

Active Votes

Proposal 69: Risk Parameter Updates for LINK, MKR, SUSHI, and YFI

  • Status: Active 2 days, 7 hrs left

  • Proposer: Gauntlet

  • Voting Results: 0 For and 0 Against

  • Summary: Proposal 69 increases the collateral factors of the following markets: LINK from 60% to 65%, MKR from 45% to 55%, SUSHI from 45% to 55%, and YFI from 55% to 60%. The increased capital efficiency for these markets follows the Moderate Risk Level selected by the Compound community, and is an ongoing task of the Gauntlet team as a part of the  Dynamic Risk Parameters initiative. More information is available on the original forum thread.

Completed Votes 

Proposal 68: End cCOMP Borrow Rewards

  • Status: Queued November 10th, 2021

  • Proposer: Arr00

  • Voting Results: 749,593 For and 0 Against

  • Summary: Proposal 68 ends COMP rewards for borrowers in the cCOMP market. The combination of the $28.95M borrowing cap and rewards distribution in the cCOMP market has created a negative borrowing rate, and prevented the market from reaching equilibrium. Ending these rewards will create a positive borrowing rate and allow the market to return to a healthy state. COMP rewards will remain the same for suppliers of this market. On the forum thread, community members are also discussing removing or raising the cCOMP borrowing cap.

Proposal 67: [Temp. Check] Should Compound retroactively distribute COMP tokens to early users?

  • Status: Failed November 8th, 2021

  • Proposer: Tyler Lowen

  • Voting Results: 121,013 For and 279,499 Against

  • Summary: Rather than changing or upgrading the protocol, Proposal 68 is the first use of the governance system to hold a vote. The proposal asked the community for their feedback on whether COMP tokens should be distributed to early users before further work is done on the distribution mechanics. This discussion has been active for the past year, with proponents arguing that retroactive COMP rewards would further decentralize the protocol and reward early users, and opponents arguing that the tokens in the treasury should only be used for future incentives.

Proposal 66: Risk Parameter Updates for AAVE, LINK, MKR, SUSHI, USDC, and YFI

  • Status: Executed November 9th, 2021

  • Proposer: Gauntlet

  • Voting Results: 1,028,127 For and 0 Against

  • Summary: Proposal 66 increases the collateral factors of the following markets: AAVE from 50% to 60%, LINK from 50% to 60%, MKR from 35% to 45%, SUSHI from 40% to 45%, USDC from 75% to 80%, and YFI from 35% to 55%. The increased capital efficiency for these markets follows the Moderate Risk Level selected by the Compound community, and is an ongoing task of the Gauntlet team as a part of the  Dynamic Risk Parameters initiative. The change to the USDC market also marks the first time in the protocol’s history that an asset has a collateral factor greater than 75%.  More information is available on the original forum thread.

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 | $50k

  • RFP 3: Bringing Compound to L2's and other chains | $50k

  • 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 management platforms as collateral | $25k

  • RFP 8: Balancer V2 liquidity as collateral | $25k

  • RFP 9: Open source Compound Interface | $50k

  • RFP 10: Ripcord wallet | TBD

  • RFP 11: Governance/Voters rewards | TBD

  • RFP 12: cToken Cleanup | $250k

  • RFP 13: cToken Interest Rate Model Changes | $100k

  • RFP 14: Gas Savings for cToken and Comptroller contracts | $100k

  • RFP 15: Dynamic COMP reward distribution | $100k

  • RFP 16: Migrate legacy cTokens | $50k

  • RFP 17: Deploy upgradeable cETH contract and migrate users to it | $50k

  • RFP 18: Uniswap V3 liquidity as collateral | $100k

  • RFP 19: Interest rate curve research | $5k

  • RFP 20: Optimism Starport for Compound Gateway | $100k

Developer Community Call Recap

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

Markets Update

Current supply on Compound is at $19.8B from 297k unique addresses. 33% of this supply volume is ETH, 22% is DAI, and 18% is USDC. (source). 

Open borrowing is at $7.7B from 9.2k unique addresses. 46% 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

  • Messari shares their State of Compound Q3 2021 report, which analyzes the macro and micro trends for the protocol over the last three months.  

  • Ripple hosts Robert Leshner for a discussion on institutions’ current usage and future adoption of decentralized finance 

  • Adam Bavosa updated the developer guide for borrowing assets from the Compound protocol. 

  • Dune Analytics’ creator Supernova created a dashboard delving into some of the protocol’s key metrics such as aggregate LTV and borrowers by address age. 

Tweet of the Week 

Twitter avatar for @jdorman81Jeff Dorman, CFA @jdorman81
Love Love Love seeing this transparency from @compoundfinance Like @MessariCrypto, we at @arca are huge advocates of voluntary transparency from projects we invest in, & will continue to point out bad actors, incl some of the exchanges who are complicit
ar.ca/blog/the-good-…

Maartje Bus @maartjebus

1/ @MessariCrypto just offered a glimpse into the future of financial reporting. If you are interested in becoming a protocol CFO, read on for key takeaways from the @compoundfinance Q3 Analyst Call featuring @rleshner @RyanWatkins_ and @twobitidiot. https://t.co/OjKb9V921s 👇