Verager wins Compound’s ETHDenver Bounty, Developer Community Call Recap, Governance Updates
Compound Digest - February 25, 2021
Verager wins Compound’s ETHDenver Bounty
Earlier this month, Compound Labs sponsored the ETHDenver conference and hackathon. For the hackathon bounty, we offered a prize of $5000 of cUSDC for the team that built the most original, new financial application. We were excited to see a number of great submissions, and ultimately chose Verager Finance as the winner.
The Verger Protocol allows users to create, trade, and redeem leveraged tokens in a trustless manner. A Verager user could purchase an ETH-DAI 3x Long token, which uses a Uniswap flash swap to make a leveraged borrow from Compound, and then exit the position by simply selling the token. The end result is a method for traders to access additional market exposure without having to worry about liquidations, margin, or funding rates. The team built a proof of concept landing page to simulate the user experience and plans to make the contracts operational in the near future.
Developer Community Call Recap
The Compound community held a Developer Community Call yesterday to discuss ongoing protocol and application development. Below is a brief overview of the topics covered. You can access an audio recording of the call here, watch a video recording here or listen to an audio recording on your favorite podcast platform.
The Gauntlet Team presented a beta version of their Autogov Dashboard, which evaluates system-wide and individual market risk for the Compound protocol. Each market is given a collateral safety score of low, medium, or high, based on the daily simulations that Gauntlet runs. As described in the accompanying forum post, the main inputs for the safety score are the average volatility, liquidity ratio, and collateralization ratio of each market. Borrowers on Compound can use this dashboard as a helpful tool to see which assets are the safest collateral types, and which assets are likely to be de-risked by the community with a collateral factor decrease. The Gauntlet team is actively looking for community feedback on the dashboard ahead of a v1 launch, so reach out to @Tarun or @jmo on Discord.
Sorawit Suriyakarn, CTO of Band Protocol, walked the community through the code for a weighted median price oracle that the Band team has been building. The medianizer allows Compound governance to choose a set of reporters as the data source for asset prices, where the reporters could include centralized exchanges, on-chain decentralized exchanges, on-chain oracle networks, or reputable independent reporters. Governance will have the ability to set the weight for each of these reporters with a setWeight function, and a price function will return the medianized price based on those weights. The current implementation of the medianizer supports data from the Open Price Feed, Chainlink, Band Protocol, and Keep3r. The Band team is preparing for a governance proposal after a community review, so reach out to @swit or @Paul_BAND with any feedback on the medianizer, or post your comments on the accompanying forum post.
Torrey Atcitty, Application Lead at Compound Labs, shared a demo of Compound Chain, which is currently in an internal alpha stage. During the demo, Torrey showed the front-end interface that contains sections for collateral assets, credit assets, and a connected MetaMask account. Torrey uploaded 50k of ZRX from the Ethereum Starport to Compound Chain, which provided him a Limit Multiplier to incur a credit balance, similar to collateral factors in Compound v2. Once the ZRX was successfully uploaded to Compound Chain, Torrey began earning interest in the form of CASH, the native unit of account on the network that is also used to pay transaction fees. Using the ZRX in Compound Chain as collateral, Torrey then downloaded USDC to his MetaMask wallet on Ethereum and the interface updated to show a negative credit balance of USDC that Torrey owes back to the protocol. Torrey also showed the ability to directly download CASH to any connected starport that supports it, which in this case was Ethereum. Lastly, Torrey executed a transfer of COMP on Compound Chain without ever owning the asset (by incurring a negative credit balance of COMP) and without paying any Ethereum gas fees. We encourage the community to ask any questions and provide feedback on Compound Chain in the #Development Discord channel, and look forward to sharing a testnet and documentation in the near future.
As a reminder, the community holds bi-weekly calls every other Wednesday at 9:30am PT. The next call will be on March 10th in the Compound Discord. Add the Compound Developers Google Calendar here. We hope to see you on the next call!
Since the last newsletter, Proposal 38 failed to pass through the governance system.
Status: Failed February 14th, 2021
Voting Results: 259,279 For and 5,000 Against
Summary: Proposal 38 failed to pass through the governance system due to an inability to reach the necessary quorum of COMP token holders. The proposal would have increased the collateral factors of cBAT and cZRX from 60% to 65%, as described in the Risk Parameter Update forum post. The Gauntlet team posted a new parameter update on comp.xyz after the vote, where they signaled their intentions to re-propose the cBAT and cZRX collateral factor increase, as well as decrease the WBTC collateral factor from 75% to 60%.
See below for highlights from the Compound Community Forum, and join in the discussion:
Setup cCOMP voting - The community continues the discussion around enabling cCOMP holders to participate in Compound governance.
Compound Finance Community Calls - @Getty suggests creating a separate Community Call on Clubhouse that is focused on general/governance topics.
cCOMP Fix (With Solutions) - @massnomis suggests increasing the COMP borrowing cap and/or lowering the COMP speeds for the cCOMP market to avoid a liquidity crunch during future liquidations.
Celo x Compound Finance & Compound Chain - @jamico asks questions about the proposed integration of Celo with Compound Chain.
Let’s start using Borrow Caps - @oliver asks the community about adding borrow caps to assets that don’t currently have one.
Participation in 「Goodfi」 a non-profit organization - @tatsuzou12 proposes that Compound joins Goodfi, a non-profit that aims to further education and research for the DeFi industry.
Add some Uniswap LP tokens as Collateral Asset - @3.1415r proposes adding support for Uniswap LP tokens as collateral for any trading pair where both assets are already usable as collateral on Compound.
Be sure to either vote on proposals with your COMP, or delegate your COMP voting rights to a representative of your choice.
Current supply on Compound is at $8.9B from 282k unique addresses, with supply briefly breaking the $10B threshold for the first time in the protocol’s history on February 20th. 26% of this supply volume is DAI, 22% is WBTC, and 21% is ETH. (source).
Open borrowing is at $4.2B from 7.3k unique addresses. 46% of this borrowing volume is DAI, 36% is USDC, and 7% is USDT. (source).
For live figures please refer to our Markets page.
Image Source: IntoTheBlock
Links & Discussions
Coinbase mentions Compound as a DeFi case study in their S-1 filing to go public via a direct listing.
Vesper Finance’s direct to Compound yield strategy for WBTC recently surpassed $100M in locked value.
Alpha Finance Lab launched a new product that allows users to borrow ETH from Compound and supply it to Alpha Homora to earn interest on the gap between the low borrowing rate on Compound and the higher supply rate on Alpha Homora.
Boardroom added verification for Compound delegates on their governance management portal.
Compound Labs CEO, Robert Leshner, joins the 11:FS Fintech Insider podcast to discuss stablecoins as the next generation of B2B payments.
B.Protocol’s Compound integration for incentivized liquidations is now live on the Kovan testnet.