[AlphaGrowth] Deploy Compound V3 on Linea

Protocol Development
1

Preamble:

Type: Multichain Deployment

Title: Deploy Compound III on Linea

Authors: @rossgates

Point of Contact: @rossgates

Overview of Proposal:

We propose to deploy Compound V3 on Linea, an EVM-compatible blockchain. Deployment infrastructure was previously built in 2023, however circumstances and opportunities changed which stalled the deployment. Now that Linea and its partners at MetaMask & MasterCard are aligned, we are once again ready to deploy on Linea. New development will be needed as there have been upgrades to the chain since the previous version of Compound was developed for launch. We’ve been told that WOOF! Should be able to develop the needed code in 1 working week.

Links

Motivation:

Linea + MetaMask + Master Card are working together to launch a Crypto Debit Card. The card is already live in the EU, Switzerland, the UK, and in Latin America (Mexico, Brazil & Columbia), with more geographies on the roadmap.

Users deposit crypto funds into their Debit Card account, then users can swipe the debit card at any store a normal Master Card debit card would be accepted. In the backend the amount they spend is withdrawn in tokens from their account and converted to cash to pay the merchant.

Linea wishes to include cTokens in the list of tokens that are “spendable” by the card. This would for example allow a user who wants to deposit 1000 USDC in their debit card account to do so as cUSDCv3 a yield bearing USDC deposited into the USDC market on Compound on Linea. This turns a user’s Debit card spending account into an interest bearing savings account where tokens are put to use up until the moment they’re spent in a store.

For this partnership with Compound to work, Compound needs to be live on Linea.

Grant Application:

We’ve not applied for the Grants Program. The Compound Growth Program @alphagrowth has agreed to cover the cost of development via their development partners at WOOF!

Non-Technical Evaluation

TVL on the Chain: $1B: source L2 Beat

$997M Linea - L2BEAT

The ecosystem’s source of truth is L2 Beat. Defillama TVL (which is TVL deployed in DeFi, aka Active TVL) differs from TVL on the chain, which looks at all assets on the chain, regardless of where it is within the chain.

Number of protocols on the chain: 109

(#) of unique addresses on the chain:

  • 6.2M unique addresses transacted on Linea
  • Weekly active addresses: 300k (as of 2024-12-12)

Active Addresses: Nansen/Dune/Artemis

1 Day: 70k

7 Day: 273k

30 Day: 1.125m

Rationale

Similar to the “Compound Reserves” that protect the protocol from losing money during a black swan liquidation event, MasterCard faces a similar risk if debit card user purchases spike during buying streaks like Black Friday. Master Card builds up its reserve with the interchange fee it charges on each credit card transaction. However to ensure they’re protected from launch, Master Card (on behalf of their market making platform Baanx) requires a 1 time $150,000 grant from Compound to seed their reserves. Funding for this grant has been ear marked by the Compound Growth Program.

In exchange for launching Compound on Linea, the initial Reserves Grant and distributing COMP to Linea users through the Compound rewards program; Linea will support Compound’s success on Linea by:

  1. Marketing Compound through Linea’s and MetaMask’s main social media accounts, and the potential for other partner accounts as well.
  2. Attending twitter spaces with the Compound team from the main linea twitter account, to discuss Compound’s deployment and what it means for the community.
  3. Directing at least $150,000 in VE DEX emissions on Linea at pools discussed with Compound that increase COMP token liquidity depth with the goal of listing COMP a collateral asset on the Compound markets on Linea.
  4. Will collaborate to develop a user experience where credit card users can convert their debit card account assets into cTokens without leaving the credit card interface once account abstraction occurs & the ramp is built for onboarding.

The Master Card credit card will likely attract hundreds of millions if not billions of TVL deposited in user accounts awaiting spending. These funds will be available to be supplied into Compound Markets, with the potential to generate millions in revenue back to the Compound DAO.

Proposed Markets

  • USDT

    • Collaterals
      • ETH
      • wstETH
      • wBTC
      • ezETH
      • rsETH

  • ETH

    • Collaterals
      • rsETH
      • weETH
      • ezETH
      • wBTC

Copyright Waiver

Copyright and related rights waived via CC0 2

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