Compound Governance Bid – DeFi Rate COMP Delegation Proposal
With final week’s launch of Compound’s governance token together with our current announcement surrounding DeFi Rate’s Governance initiative, it ought to come as little shock that we’re pursuing Compound as our first DeFi political marketing campaign.
1/ Today we’re excited to publicly announce our initiative in the direction of changing into a number one #DeFi governance delegate 🔥
Full announcement 👇https://t.co/UNQVnQpBMg
— DeFi Rate (@DefiRate) April 20, 2020
For these , you possibly can delegate COMP tokens to our official governance pockets: defirate.eth.
Our publish earlier this week outlined a number of subjects to remember when contemplating governance delegation. With that, we’ve determined it will solely be honest to undergo it step-by-step and element why we imagine we’re a terrific match for the job.
Towards the tip, we additionally element some initiatives we’d like to assist lead and the way we intend to develop the Compound protocol within the coming future.
Let’s get into it!
Specialized Knowledge – Is this occasion nicely versed on the topic?
Since beginning DeFi Rate in July, the lending sector has undoubtedly been our major space of protection and is the driving cause behind our bid as a Compound delegate. Our lending dashboard has grown to change into one of many go-to sources for the DeFi neighborhood when evaluating lending charges throughout completely different initiatives – Compound included.
Compound was one of many first initiatives we coated and we proceed to cowl it extensively. We’ve seen first hand how the lending protocol has grown prior to now 12 months together with the way it faired relative to the remainder of the market.
In abstract, right here’s a few of the content material our crew has produced round Compound prior to now few months, hopefully supplying you with loads of assurance that we’re nicely-versed within the DeFi’s greatest lending protocol.
Is there an space of Compound you imagine we needs to be extra nicely-versed on? We’re open to listening to any and all suggestions!
Experience – Does this occasion have a background that makes them nicely suited to make the proper decisions?
As we outlined above, the lending sector is our greatest focus right here at DeFi Rate. With that, we’ve been lucky sufficient to have a entrance-row seat to the expansion of permissionless lending prior to now 12 months. We’ve watched Compound evolve from a lending protocol with solely $20M in worth locked heading into the Summer of 2019 to watching it cumulate over $1.5B in whole deposits final month.
Our intensive protection on Compound has given us our justifiable share of expertise and alternative in understanding the main lending protocol.
Intent – How does this occasion stand to profit from being a delegate?
By changing into a Compound Delegate, our hope is to develop Compound, the lending sector, and DeFi at giant to succeed in a mainstream viewers. We need the world to expertise the advantages of open finance and the potential it holds for shaping our monetary future.
Seeing as lending is one in all our specialties at DeFi Rate, we clearly stand to profit from development within the lending protocol as extra customers discover the vary of lending charges out there available on the market. Our potential to hone in on lending makes us a terrific candidate for the way forward for Compound.
Direction – Where would this occasion wish to see the challenge go? How will this affect their choices?
We need Compound to succeed. As it stands at present, it’s clear that Compound is the sector chief in terms of lending – and rightfully so! We need to see Compound proliferate as an open cash market protocol for international finance. We imagine that every one property, each crypto and conventional, may benefit from the underlying cash markets that Compound can present.
We need to aide in Compound having the ability to supply a wider vary of property, different mortgage sorts like secure charges and flash loans, and the mixing of insurance coverage within the type of intuitive covers into the protocol to higher shield the much less skilled userbase.
All in all, we need to create a seamless lending and borrowing expertise that’s aggressive with the broader market. We need to see the protocol be adopted by the worldwide inhabitants, and in flip, have the protocol acknowledged as a useful piece of software program inside conventional monetary markets.
Lastly, we need to regularly discover the composable nature of cTokens and Compound good contracts. Using initiatives like Dharma, Set Protocol PoolTogether, Opyn and SwapRate as examples, (all of which use Compound in some form or type) it’s fairly clear that a robust basis has been laid for lending merchandise to emerge increased up the stack. We intention to convey these alternatives to the desk for consideration and help.
Commitment – Will this occasion be lively in its governance participation and due diligence?
We’re devoted to main Compound to the most effective of our potential. We intention to run a clear governance course of by way of Discord (because it’s seemingly the one strategy to succeed) so all delegators have a possibility to weigh of their ideas on any governance choices.
In addition, we’ll publish governance experiences outlining any and all pertinent info surrounding Compound Governance choices and our rationale behind these choices.
Now that we’ve that stuff out of the way in which, let’s suggest what we’d wish to work on as part of the governance committee.
Expanded Asset Listing Framework
An expanded asset itemizing framework is a crucial piece for the lengthy-time period success of Compound. By simply having the ability to qualify property for itemizing on the cash markets protocol, we will strategically increase provided property to increase the protocol’s person base into different token communities.
Initially, we’d draw on Synthetix’s Asset Listing Framework for a fundamental reference on learn how to strategy this. In quick, it ought to come down to 2 core traits: (1) liquidity and (2) safe value oracles. There have to be a major quantity of liquidity to reduce slippage and value manipulation. In flip, that is solely potential with a safe value oracle backing asset.
We’d like to acknowledge that this initiative might take time to correctly dial-in and would like to welcome all participation on this endeavor.
New Assets Proposals
Upon establishing an Asset Listing Framework, we intention to suggest new property to be listed on Compound because the governance committee sees match. Currently, supported property on Compound are relatively restricted in comparison with competing lending protocols like Aave. Importantly, exterior of stablecoins, most lending swimming pools are providing negligible returns to depositors.
In order to vary this, we’d wish to discover property which have seen success on different lending protocols when used as collateral in addition to property that supply comparatively engaging charges because of the nature of their economics.
This might embrace:
- Other stablecoins (BUSD, USDT, PAX, TUSD, sUSD, and so on.)
We acknowledge that a US-primarily based entity, Compound has a effective line to stroll by way of compliance and sign. We don’t intend to hurry any listings, relatively to curate discussions surrounding the introduction of recent property in order that they might be applied in a well timed vogue.
Generally talking, Compound’s potential to help in-demand property in a safe, permissionless vogue is what we imagine will drive future development. By opening up the variety of supported property, extra customers could also be drawn to the protocol both in search of leverage utilizing their favourite ERC20 token as collateral or by capitalizing on the engaging yields they might supply relative to returns on the property at present being supported.
Driving this level residence, the varied nature of DeFi lending protocols is among the core differentiators between centralized suppliers like BlockFi. Instead of attempting to stimulate demand by inflating rates of interest by way of different mechanisms, we view the introduction of extremely examined and clearly demanded Ethereum-based tokens to be a terrific center-floor.
Coordinating Governance & Risk Meetings
Communication is essential. We’ve seen a number of different DeFi protocols, specifically MakerDAO, efficiently orchestrate governance and danger conferences which have been crucial for distributing key info and gathering indicators on completely different subjects.
As such, DeFi Rate can arrange routine governance conferences. The frequency of those conferences will seemingly change over time as governance performs an more and more necessary function within the success of Compound.
The necessary notice right here is that we’re keen to decide to the group, upkeep, and notice-taking throughout these conferences – in the end aiming to change into a trusted useful resource for different delegates who could also be unavailable because of prior commitments.
Insurance is shortly changing into a significant piece for investor safety. As a Compound Delegate, we are going to push for the native integration of an insurance coverage supplier into the protocol. With this characteristic, customers will be capable to make a deposit or borrow from the protocol and shield that capital instantly from Compound’s entrance-finish – relatively than having to navigate to a different platform as we see at present.
Both have their advantages and downsides and we’d like to discover a possible integration with Compound’s key gamers on which platform can be finest fitted to finish-customers.
DeFi Rate has established relationships with each of those groups, most notably by way of unique interviews with the challenge’s founders which could be discovered right here (Hugh from Nexus) and right here (Aparna from Opyn). We imagine this makes us nicely geared up to additional these conversations within the occasion that there’s a clear demand for these integrations.
Additional Loan Types
While variable loans are nice, it’s necessary that Compound expands its product providing for a rising person base. Notably, we’ve seen two core improvements inside DeFi lending in current months.
The first is mounted-charge loans. Fixed-rate loans act as one of many greatest debt markets in conventional finance and may undoubtedly be thought of as a product for Compound. While the precise implementation must be explored deeply, it is a product we’d love to supply Compound customers sooner or later.
The second is a crypto-native mortgage kind – flash loans. Despite the truth that flash loans have obtained a nasty rep by the DeFi neighborhood, they’re in the end one of the crucial revolutionary creations we’ve seen so far in DeFi. As such, it’s necessary for Compound to supply revolutionary options that may’t be discovered anyplace in conventional finance.
Aave’s flash loans have seen huge success in current months as DeFi customers capitalize on the potential arbitrage alternatives whereas DeFi aggregators like DeFi Saver are leveraging the monetary primitive for novel use circumstances like superior administration methods for Maker Vaults.
We imagine flash loans might act as one of many subsequent catalysts to propel the lending protocol additional. That mentioned, we’d like to discover the potential for integrating flash loans into Compound.
Protocol & Token Economics
The Compound Protocol and COMP token economics are nonetheless in its early phases. Fortunately, our Governance crew is provided with people who’ve spent years engaged on token economics, DAOs, and DeFi.
We need to make sure the protocol is correctly incentivized and funded for its lengthy-time period success. We’d wish to discover the potential for protocol charges directed in the direction of a DAO. By implementing these economics, we will make sure that Compound is self-sustainable nicely past Compound Lab’s runway.
The DAO’s treasury fund might be managed by COMP holders at giant (not simply delegates) who direct the protocol’s capital how they see match. This might embrace hiring Elected Paid Contributors (EPCs) like MakerDAO, Marketing initiatives, together with funding protocol integrations and different instruments for builders.
The most vital facet of DAOs is that of neighborhood and coordination. Building off our crew’s expertise with DAOs like MetaCartel and Raid Guild, we imagine we might be nicely suited to spin up a set of experiments to higher align incentives relating to any new protocol & token financial designs.
We’re extraordinarily excited to be kicking off our governance initiative with a protocol that’s so intently aligned with our work at DeFi Rate. Compound’s potential to behave because the spine for international cash markets is extraordinarily profound. The incontrovertible fact that this chance is even a actuality is a powerful testomony to the thrilling future DeFi is constructing each day.
Beyond Compound itself, this thought-course of has generated plenty of thrilling discussions for the way forward for DeFi Rate and the rising function of specialised data suppliers within the web3 ecosystem. What’s maybe most fascinating about Compound is there isn’t a inherent hypothesis with COMP tokens – making it drastically completely different from just about each different ERC20 governance token available on the market.
It’s this core part that makes us that rather more motivated to solidify our repute as a trusted useful resource for the DeFi neighborhood at giant. All in all, every little thing outlined on this proposal is precisely that – a proposal. We’re hoping to garner some suggestions from the neighborhood on what they’d wish to see with the way forward for Compound.
While there’ll seemingly be minimal delegation within the subsequent few weeks given COMP tokens are nonetheless being slowly rolled out, we needed to take the leap and spotlight our plans and ideas on how we’d develop the protocol sooner or later given the chance to take action.
Please be at liberty to succeed in out to us together with your suggestions or any questions. In the approaching week, we’ll be opening the official DeFi Rate Discord for discussions on our governance plans.
If you’re a COMP holder and also you imagine in our imaginative and prescient and fervour for DeFi, you possibly can delegate your tokens to our official governance pockets – defirate.eth
This is just the start of a protracted highway for our governance initiative. More particulars surrounding different protocol governance initiatives shall be launched within the close to future.
Get fired up! We absolutely are.