Preamble:
Type: Multichain Deployment
Title: Deploy Compound III on Unichain
Authors: Ross Gates, Uniswap Foundation
Point of Contact: Erin Koen (@eek637)
Overview
We are requesting the launch of Compound on Unichain, which will go live in the coming weeks. This would be the first early (as close to day 0 as possible) launch of Compound on any chain.
Unichain is an OP-stack optimistic rollup and a member of the Superchain. It will ship as a standard implementation of the stack, but will soon see feature upgrades to enable 250ms block times and the UNI Validation Network. These upgrades will occur outside of the core OP stack, and will be rigorously audited per Uniswapâs exacting standards.
The Uniswap Foundation (UF) is working with Gauntlet on a DEX liquidity incentivization campaign; with that in mind, we anticipate sufficient liquidity to support the $50m+ of Compound utilization that will align this deployment with the requirements defined by their New Chains Team here.
Links
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ETH is the gas token
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Standard OP stack chain without any modifications; all OP stack audits apply
Motivation
We are excited to have a list of premier DeFi protocols that are planning early deployments on Unichain, and believe that we are well on the way to creating an ecosystem where inter-protocol collaboration can be a rising tide that lifts all boats. A battle-tested lending protocol is a key part of the ecosystem we are working to build, and believe there are many opportunities for Compound to explore new use cases and market expansion strategies in concert with both Uniswap v4 and the larger ecosystem. For example, Compound could:
- Allow liquidity providers to use their LP tokens as collateral (link to post).
- Build delta neutral vaults that combine liquidity provision on Uniswap Protocol with borrowing on Compound to earn LP fees without price exposure.
- Build Protocol Owned Liquidity strategies for Unichain-native DeFi protocols
- Support money markets for long tail assets on Unichain through Compound Sandbox
- Deploy Compound-owned cUSD into stablecoin liquidity positions
- Be a home for out of range liquidity deployed on Uniswap v4 using a hook
Et cetera. v4 hooks, in particular, provide fertile ground for experimentation and market expansion. We are excited to see how people and protocols use them to create new products and services for users.
Grant Application
We have 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! @woof.
Additionally, the UF has committed to fund two $450k grants for lending protocols to grow their TVL on Unichain. Which protocols receive grants will be decided by a futarchy-based protocol built by another one of its grantees, Butter. The application for this program can be found here. This is an exciting opportunity for the Compound protocol to participate in a first-of-its kind experiment that leverages the wisdom of the crowds to identify the best available option for a given task. In this case, the task will be âincrease lending protocol TVL on Unichainâ and the available options will be any lending protocol that applies. The market will identify which two protocols it believes to be the most likely to accomplish the task, and the UF will make a grant to each.
Non-Technical Evaluation
Typically chains are evaluated on their TVL and activity. Because this is a Day0 deployment, those statistics are not available. That said, the UF plans to work with Gauntlet to incentivize DEX liquidity to grow Unichainâs TVL and transaction volume. We anticipate that program to start shortly after Unichainâs mainnet launch and are targeting a TVL that puts Unichain in the top 5 L2s by that ranking within six months.
Rationale
The UF is committed to the growth of a large, positive-sum DeFi ecosystem on Unichain. We are building for long-term, sticky growth by providing DeFi builders access to deep liquidity and useful financial primitives provided by battle-hardened protocols. Compound is a key player in the ecosystem we are working to build, and we are looking forward to collaborating on making this deployment a success.
Proposed Markets
Day0 Unichain will support USDC, wETH, and wstETH. Initial markets will be the following.
- ETH
- wstETH
- USDC
- wstETH
As Unichain onboards additional assets, we would like to extend the Compound deployment by including the following assets in Compound markets over time.
ETH Market
- weETH
- ezETH
- rsETH
- wstETH
- rETH
- COMP
- UNI
USDC Market
- WBTC
- wstETH
- weETH
- ezETH
- ETH
- USDE
- sUSDe
- USDM
Security Considerations
Unichain will be the first Day0 implementation of Compound on a chain. As such, Gauntlet will give directional recommendations for markets, but nothing concrete until the chain is live. Compoundâs âAlternative Governanceâ will be prioritized for Unichain which will enable collateral cap updates in 3 days rather than 8. This will allow fast response times as the ecosystem grows quickly after launch.
Because Unichain is an Optimistic Superchain and Compound is deployed on other chains using the same stack, technical auditing should be quite similar.
Currently Unichain supports Redstone Oracles which have been previously audited and approved by Compound.
Copyright Waiver
Copyright and related rights waived via CC0 2