Compound LitQuidity

Ideas
2

Thanks for taking time to put a variety of thoughts together @massnomis.

A few points around mechanics:

  • If assets are held in the Timelock contract (of which Governor Bravo is the admin), then use of those funds requires COMP token-holder approval
  • If assets are held in a multi-sig wallet (e.g. the community multi-sig), use of those funds does not require COMP token-holder approval, and instead of based on a social contract, Snapshot voting, etc.
  • The Timelock by default acts as the Compound “treasury”; any reserves removed from a market first enter the Timelock
  • The Timelock contract can receive governance instructions from COMP-tokenholders, including to borrow assets, transfer them, etc; it can collect COMP on its own (although the claim function can be called by anybody to collect the Timelock’s COMP).

In regards to the PoolTogether proposal, without any code changes, token-holders could through a proposal:

  1. Transfer a significant overcollateralization of COMP to the Timelock (such that it doesn’t face, in any short time-frame, reasonable liquidation risk)
  2. Approve COMP to cCOMP; enable cCOMP (and cUNI?) as collateral; mint cCOMP; borrow USDC
  3. Call the sponsor function of PoolTogether; end sponsorship if/when ready

This process would not change the dynamics of the community, proposal process, or entrust any individuals with funds or managing assets; the entire process would be subject to COMP token-holder governance.

If this process is successful, the community could expand liquidity operations in any number of ways; all of which will be fun to design and debate.

2 Likes