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Compound Launches Institutional-Only Lending Market
Compound Foundation has introduced a new lending market exclusively for institutional clients, following the recent relaunch of its protocol focused on institutional credit. This initiative, which is part of a $52 million program approved by the Compound Decentralized Autonomous Organization (DAO) in August, aims to enhance capital efficiency and service standards for institutional borrowers. The market will operate on Compound v3 and allows whitelisted borrowers to access specific collateral sets and loan-to-value ratios, distinguishing their borrowing conditions from retail users.
The new market supports lending in USDC against four assets: ETH, wstETH, WBTC, and cbBTC. With a total value locked of $1.53 billion, Compound ranks sixth among lending protocols, experiencing a 23% increase in borrowing over the past month. The launch was met with strong demand, as the market was oversubscribed on its first day, with participation from firms such as DeFi Saver and Yearn. Aaron Schnarch, executive director of Compound Foundation, expressed optimism about meeting institutional demands through this new offering.
Eligibility for participation begins at a minimum deposit of 100,000 USDC, with Compound allocating 200,000 USDC in supplier incentives for whitelisted participants over three months. The market's structure allows for higher loan-to-value ratios due to its focus on a limited number of liquid assets. The Foundation has indicated that this launch is just the beginning, with plans for additional capabilities in the future as it seeks to expand its institutional offerings.
Source: KLEA News