As the Compound Growth Program concludes a successful first Quarter of operations into the 12 Month term, here is our report on the TVL growth for the protocol.
Key Highlights
Over the Past few months, we were able to spearhead significant expansion campaigns that directly resulted in TVL increase to the tune of $418 Million. Beyond this, addition of standalone collaterals to existing markets resulted in supply of more than $80M in collateral deposit and addition of more than $4000M in collaterals in total. Here is the breakdown and
Mainnet USDT Comet: $180+ Million TVL added
One of the main targets of development of the Growth program was adding USDT Comets on 4 chains. Out of which USDT Comet on Mainnet was supposed to be our primary push.
We are delighted to inform the community that the effort has been a big success. Within 2 months of launch, the TVL (Active deposits) on the USDT market currently are valued at $183.41 Million. The market was launched recently in early July this year.
Arbitrum Comets: ~$200 Million TVL crossed
Another of our most successful efforts was the growth of Compound on Arbitrum. The Growth program team had secured a 1.8M ARB grant from the Arbitrum DAO. We started distributing the incentives mid June when the Compound TVL on Arbitrum was slightly above $50M. Over the course of 3 months, we allocated the incentives to various partners, and when the incentive programs concluded on 2nd of September, Compound TVL on Arbitrum hovered around $213 Million, currently sitting at $175 Million.
Optimism Initialization: ~$38 Million Peak TVL reached
We began developing the OP integration for Compound early December. We launched the first Comet on Optimism around 15th April and continued rolling out 2 more comets in the coming months. Currently there are 3 comets, USDC, USDT and ETH for Compound on Optimism. After beginning incentive distribution for the 150K OP we received, Compound TVL on Optimism climbed to $38 Million, which subsequently nosedived following the Proposal 289 saga. Compound TVL on Optimism currently is $16 Million.
Collaterals : $350M+ Collaterals added
For Collaterals we added on existing Compound Comets, more than $350 Million has been supplied for the collaterals (Value of collaterals in dollar terms on Monday 9th September. 2024)
Here is an interesting Dune chart by @dmitriywoofsoftware
Full details
For Chain specific TVL metrics, we cover 3 chains Mainnet, Optimism and Arbitrum. The first one due to its size and the latter two due to ongoing incentive programs.
Mainnet
TVL on mainnet has witnessed fluctuations in Q1. Briefly crossing 1.5 Billion mark in March-April period, the TVL maintained its level for most of the part of the reporting period. The TVL witnessed a major decline in the beginning of August which we now attribute to the investor fears associated with the passing of Proposal 289.
Image: Market and Collateral additions by the Growth Program on Mainnet
Arbitrum
Arbitrum witnessed a major rise in TVL in The Growth Program Q1 period.
Some background, AlphaGrowth had secured a major 1.8M ARB grant from the Arbitrum Foundation. The entirety of the grant was to be used for user incentivizations. We began distributing user incentives around June 15th. By July we started seeing results with rise in TVL. As it stands, Arbitrum is the only L2 where Compound has a TVL of more than $100 Million. Overall we were able to make the TVL rise from 51 Million to 135 Million within this period.
Image: 2 new markets (USDT and ETH) added by the Growth program on Arbitrum
Optimism
Compound on Optimism witnessed a spectacular rise. This is due to two factors
- The Growth program launching 3 Markets on Optimism - USDC, USDT, ETH
- Distributing 60K OP in incentives on the OP market since Mid July
AlphaGrowth had secured a 150K OP grant from the Optimism ecosystem at the time of the launch of Compound on Optimism in Mid-April. Once we started distributing incentives, Compound TVL on Optimism rapidly grew from $10 Million to almost $40 Million.
The TVL witnessed a rapid decline at the end of July and the beginning of August, dropping from ~$40 Million to ~$20 Million. Again, user fears from Proposal 289, black Monday and pausing incentives all contributed to this decline.
Image: 3 new markets added on Optimism by Growth program
User Growth
General User Growth
The above image mentions the growth of new wallets on Compound after taking over the Growth Program. Please note (user growth on Scroll is not directly incentivised by the growth program)
A part of the user growth, specifically on Optimism and Arbitrum can be directly attributed to the Growth Program activities. Full dune dashboard can be found here. The userbase on these two chains has also remained considerably sticky, with the exception of the protocol wide loss of users after Proposal 289.
Daily Active Addresses
The daily active address on Compound in general has varied from 1K to peaking at 13K. Currently the daily active addresses hover at 1.3K. Over the past few months, we have spend considerable time in trying experiments that attract users to the platform. Peak came in Mid June which also coincided with multiple marketing campaigns spanning across different chains.
Current focus is on identifying Marketing channels that give Compound long term users.
Chain Specific User Growth:
For Chains, Compound witnessed growth in users on multiple chains. A couple of Chains where Compound witnessed massive user base growth happened on Scroll and Base, this was not a result of an active Campaign by the growth program on these chains, but a result of the Campaign from our partners Layer3.
We have listed user growth on each chain and their correlation with Growth Program efforts
| Chain | User Growth | Growth reasons |
|---|---|---|
| Mainnet | 2130 | Natural + New Market addition |
| Base | 46727 | Quest Campaigns (Not financed by Growth Program) |
| Scroll | 34300 | Quest Campaigns (Not Finance by Growth Program) |
| Arbitrum | 11896 | Direct (Grant Incentivisations) |
| Optimism | 17896 | Direct (Grant Incentivisations) |
| Polygon | 524 | Direct (New market) |
Observations
- While Base and Scroll both attracted higher number of users, this did not translate to a significant increase in TVL on these Chains through the users. Quest platforms can attract large number of users, but this does not give a desirable effect on protocol metrics. The users also are not on the protocol for long terms
- An example, total active wallets on Scroll USDC market are nearly 20K, but the TVL on Scroll is merely $2M . (User Count Source: Gauntlet )
- For Base WETH market, the total number of inactive wallets have surpassed the active wallets, a phenomenon that we have not yet witnessed on markets on other Chains.
- Certain Compound Markets on L2s witnessed sharp decline in users following the Proposal 289 Incident. All the affected markets are on a recovery trajectory. (Example Arbitrum USDC Market)
Negative Impacts of Proposal 289.
With the FUD associated with Protocol 289, Compound witnessed an exodus of a significant amount of capital and users from the platform. On Mainnet alone, the TVL dropped from $1.75Bn to $ 1.25 Bn, marking a decrease of $500M in TVL. The mainnet markets have not yet recovered from this fall.
As we continue to expand Compound’s growth in multiple directions, we expect to conduct even more experiments to drive TVL to Compound. Stay tuned for more updates!