A few months ago, we began the discussion for a new multi-chain strategy; a version of the Compound protocol that can be deployed and run on all EVM compatible chains.
Today, Compound Labs is excited to release a code repository to the Compound community, which we hope can form the basis of a multi-chain deployment strategy: comet, which the community has been referring to as Compound III.
Compound III is designed with borrowers in mind, to be capital efficient, gas efficient, safe, and simple to govern.
The repository uses a business source license, which Compound governance can grant usage to, as it sees fit, by making changes to
compound-community-licenses.eth, a new ENS domain owned by the community.
Developers can begin planning integrations with Compound III, and auditing / suggesting improvements to the codebase.
The following is a summary of the major changes from the existing protocol:
- Compound III deployments feature a single borrowable (interest earning) base asset. All other assets are collateral. This reduces risk, and can improve capital efficiency.
- Collateral size limits can be set for each collateral asset (a.k.a. supply caps).
- There are separate borrowing collateral factors, and liquidation collateral factors. This protects borrowers from early liquidation, and can improve risk management.
- The risk management / liquidation engine has been entirely redesigned, to increase the safety of the protocol while preserving liquidator incentives.
- The price feed doesn’t expect a custom price oracle; instead, it is designed to use Chainlink directly, which is portable to EVM chains beyond Ethereum; governance can modify this decision in the future.
- Supply/borrow interest rate models can be decoupled from one another; governance has full control over economic policy.
- Advanced account management tools, which can enable new UX patterns and applications on top of the protocol.
- An abstract incentive metric is built natively into the core contract, to enable rewarding user activity from day one of the protocol. A rewards system is elegantly added on top to provide incentives similar to v2, but flexible enough to be extended by governance in new ways.
- A code repository which includes sophisticated tooling for managing and testing deployments, based on years of experience and feedback from prior versions of the protocol.
Over the coming weeks, we look forward to working with the community to finish auditing the protocol; learning from the current testnet; releasing an initial deployment on Ethereum, with interfaces, liquidation bots, and tooling; and beginning deployments across other EVM chains with tools for governance to manage those deployments.
If you have any questions, please join the next Community Developer call in Discord!