With the Morpho-Compound-Polygon collaboration now live, Gauntlet will manage vaults in line with the parameters outlined in the approved proposal. Below is our structured approach for updates and adjustments to ensure efficient execution while minimizing governance overhead.
Ongoing Management & Adjustments
Dynamic Parameter Optimization: Incentives and risk parameters will be continuously adjusted in real-time to optimize capital efficiency and risk management.
Real-Time Monitoring: Vaults will be actively monitored, with incremental updates made as needed to maintain performance and mitigate risk.
Vault Additions
New Vault Deployments: Any new vault launch will be announced in this thread to keep the Compound DAO informed of key developments.
On-chain proposal to transfer ownership to the DAO targeted within 48 hours of new vault deployment.
Community Engagement & Reporting
Open Forum: Feedback and questions are always welcome in this thread to ensure alignment with community expectations.
Immediate Alerts: If an urgent issue arises (e.g., unexpected market behavior), we’ll post a dedicated update to coordinate the next steps with the DAO.
Next Steps:
Let us know if you have any questions or feedback.
Polygon PoS network is currently undergoing scheduled maintenance and network upgrades. During this time, there may be intermittent disruptions to block production, which could affect transaction finality and effect operations on both Compound v3 comets and Compound Blue markets deployed on Polygon.
The Polygon team is actively working to complete the upgrade. Based on current estimates, we expect normal block production and finality to resume within the next 3 hours or earlier.
No action is needed at this time. Gauntlet will continue monitoring the situation and will provide updates as needed.
Hi @ico - thanks for your question. To clarify - rewards have not ended. They shall be refreshed. However, the Polygon POS network is currently undergoing scheduled maintenance.
Compound Blue launched in early 2025 as a collaborative pilot between Compound and Morpho to explore vault-based lending infrastructure on Polygon. The initiative leveraged Morpho’s vault architecture with Compound branding and incentives to test alternative deployment models and gauge demand for isolated lending markets on L2 networks.
Gauntlet has managed these vaults since inception, handling dynamic parameter optimization, risk management, and real-time monitoring across four primary vaults: compWETH, compUSDC, compUSDT, and compPOL. The trial attracted $188.73M in peak TVL (May 2025) and served as the launchpad for the first Apollo ACRED RWA looping strategy in DeFi.
When Compound Blue launched, Compound faced uncertainty around its future direction. Over the past year, Compound’s outlook has shifted significantly. The protocol now operates under strong leadership with a clear roadmap and active growth plans. With TVL declining organically following the tapering of incentives, and considering the attention and maintenance cost required maintaining a separate Morpho-based deployment no longer aligns with the DAO’s strategic direction.
With these considerations, we recommend a staged wind-down of Compound Blue through the following steps:
Jan 26: Publish Compound Blue Deprecation forum proposal
Jan 30: Initiate Snapshot proposal to gauge delegate sentiment
Feb 6: Publish a banner on Compound Blue UI informing users of the deprecation plan
Feb 6 - Mar 6: 4-week wind-down period for users to close positions
1) Create a Snapshot Vote to gauge community sentiment
Set caps to zero across all Compound Blue vaults to inhibit new borrows
Repayments, withdrawals, and liquidations remain active
2) Wind-down period
Users will have 4 weeks to withdraw funds and close positions
Gauntlet will continue monitoring vaults throughout the wind-down period
3) Communicate to users
Illustrative UI banner on Compound Blue: Compound Blue is being deprecated through governance. The DAO no longer supports Compound Blue and is not responsible for covering losses or distributing rewards. Users remain solely responsible for managing their positions. New deposits and borrows are disabled, but repayments and withdrawals will remain available. For continued lending activity, you are encouraged to use Compound V3.
4) Frontend closure
Following the wind-down period, vaults will be fully deprecated
Accumulated fees and any residual funds will be sent to the DAO
Users will still be able to interact with the vaults on the Morpho frontend
Timeline
Milestone
Target Date
Outcome
Forum post
Jan 26
Share the Compound Blue deprecation plan
Community discussion
Jan 26 - Jan 30
Collect feedback, answer questions
Snapshot vote & sentiment check
Jan 30
Gauge community sentiment
Publish UI banner
Feb 6
Inform users of the Snapshot vote outcome
Wind-down period
Feb 6 - Mar 6
4-week withdrawal window
Frontend wind down
Mar 6
Complete deprecation
Next Steps
We welcome community feedback on the proposed plan and timeline. Following discussion, we intend to initiate a Snapshot vote on January 30th to gauge support for Compound Blue deprecation.
Glad to see this wind-down; as I anticipated (at least directionally), this experiment returned effectively zero sticky TVL; delivered less than 10% of incentives approved by the DAO back as fee revenue; and further cemented external observer consensus that the DAO had capitulated on its own contracts in favor of a competitor’s tech stack.
Gauntlet does good work for the DAO in its core risk management mandate. This experiment, however, was a mistake. I, for one, would welcome a franker post-mortem from Gauntlet on what went to plan, what didn’t, and why this experiment didn’t meet the objectives the team was so confident in delivering at the time of the proposal. I also think it is important (at least symbolically, if not technically) for Gauntlet and CGWG to prioritize the return the not-quite-dust quantity of COMP in the multisig that was spun up for this initiative back to the DAO.
