Compound – the popular money market protocol – has revealed their plans for further growth by announcing the imminent launch of the new Compound Chain.
Today, we're excited to share the whitepaper for Compound Chain, a distributed LEDGER capable of transferring value & liquidity between peer ledgers.https://t.co/TFjJ0JbToV pic.twitter.com/lCzrGyscPa
— Compound Labs (@compoundfinance) December 17, 2020
The Compound Chain appears to be an open permissioned hub that enables cross-chain lending and borrowing of digital assets. There are already plans to build integrations with some of the widely used layer-1 chains and scaling solutions such as Polkadot, Solana, Optimism, and more.
The team behind Compound has called this new chain a “re-imagination” of the original lending protocol that will connect the current users on Ethereum in DeFi with markets running on permissioned ledgers. This new standalone chain will also be accompanied by a new token called CASH. The new token will be used to pay for all transaction fees and also accrues a compounding interest rate to holders.
This new chain employs a more centralized consensus mechanism and has thus far received mixed feedback from the DeFi community. Governance of this new chain will ultimately be in the hands of COMP token holders on the Ethereum mainchain.
This new chain will be rolled out over the next year and you can find additional details about its architecture here.
Popular DeFi accounts focused on research and analysis have pointed out that this may be Compound’s play at becoming the leading DeFi protocol for institutional entities to dip their toes into.
Read COMP chain doc. Appears @rleshner is building an open, permissioned hub (via separate chain) for x-chain asset lend / borrow (similar to $RUNE in a way), also with USDC/T/DAI competitor emerging. Think he's prepping for (a) custody of real-world asset & (b) TradFi entries https://t.co/A2SW4QdLiO
— Maple Leaf Capital (@MapleLeafCap) December 19, 2020
This theory is in line with some of the other partnerships we’ve heard in the news earlier this year involving Compound and DeFi accessibility providers like Fireblocks. Together they launched the first institutional crypto savings accounts back in March.
Keep up with Compound by following their Twitter.
Business Development and Operations at TrustToken – TUSD. Jack is a startup generalist and DeFi enthusiast. Stay connected with him by following @HHJackSun on Twitter.
