Consortium of DeFi Lending Platforms (COMP) Launches New 'Simplified' Protocol Upgrade
Decentralized lending platform Compound has launched a new “rationalized” version of the protocol called “Compound III”.
With the update, Compound (COMP), an algorithmically autonomous interest rate protocol, is moving away from a pooled risk model where users can borrow any asset, according to a new blog post. from Robert Leshner, founder of Compound Finance.
Leshner explains,
“In this [pooled risk] model (which Compound pioneered), collateral is constantly being reimagined. A single bad content (or oracle update) can pull all content from the protocol.
Instead, each Compound III implementation has a loanable asset. When you provide collateral, it remains your property. Other users can never withdraw it (except during liquidation). Capital efficiency also increases – collateral is more ‘useful’ when you know which assets are being borrowed ahead of time.”
The founder says the upgrade will make Compound cheaper, faster, safer and more capital efficient. The first implementation of Compound III will allow users to borrow USD Coin (USDC) with Ethereum (ETH), Wrapped Bitcoin (WBTC), Chainlink (LINK), Uniswap (UNI), and COMP as collateral.
COMP is trading at $46.81 at the time of writing. The 122nd-ranked crypto asset by market capitalization is down nearly 9% over the past 24 hours and is still down nearly 95% from its all-time high of $910.54, which it reached in May 2018. 2021.
Aug 27, 2022
