Preamble:
Type: Multichain Deployment
Title: Deploy Compound III on Sonic Mainnet
Authors: @YJN21, DeFi Growth Lead at Sonic Labs
Point of Contact: @YJN21
Proposal Overview
Objective:
This proposal seeks to authorize the deployment of Compound III on the Sonic Mainnet. By integrating Compound III, Sonic aims to provide an efficient and user-friendly lending and borrowing solution, expanding the protocol’s offerings and enhancing its competitive edge in the DeFi landscape.
Links:
Website: https://www.soniclabs.com/
Social: x.com
Litepaper: Sonic Litepaper | Where Builders Come First
Coingecko: https://www.coingecko.com/en/coins/fantom
Motivation:
Sonic: A Brief Overview
Sonic is a high-performance EVM-compatible Layer-1 blockchain designed to power decentralized applications (dApps) with speed, scalability, and developer incentives. It supports up to 10,000 transactions per second with sub-second finality, making it a robust infrastructure for modern DeFi and blockchain use cases. Developers can build using familiar tools like Solidity and Vyper, while users benefit from reduced costs and seamless interaction with decentralized systems.
Key Features:
Sonic Gateway: A secure decentralized bridge enabling seamless access to liquidity across Ethereum and other networks, with advanced fail-safe mechanisms to protect user assets.
Fee Monetization Program: Developers can earn up to 90% of the transaction fees their apps generate, fostering a sustainable ecosystem for builders and incentivizing innovation.
Airdrop Programs: The platform distributes 200 million $S tokens to incentivize user engagement, rewarding activities like bridging assets and participating in dApps.
Innovator Fund: An allocation of up to 200 million $S tokens to support new projects and onboard innovative applications.
Ecosystem Incentives: Sonic Points encourage user activity, rewarding both liquidity provision and ecosystem engagement through structured seasons.
Sonic’s mission is to provide developers with the tools to scale their applications while delivering smooth and efficient experiences to users. The network is poised to launch in December 2024 and represents a bold step forward in the blockchain space.
Rationale - Benefits to Compound
Compound III is designed to be a streamlined version of its predecessor, offering enhanced capital efficiency and risk management. Deploying Compound III on Sonic will:
- Attract a broader user base through improved efficiency and reduced costs.
- Strengthen Sonic’s DeFi ecosystem by incorporating a proven lending market with widespread adoption.
- Provide access to a simplified borrowing model, catering to both retail and institutional users.
- Sonic Labs to deposit $5M in $S tokens until Compound reaches $50m TVL on Sonic
- $500K Incentives in $S tokens to Compound for distribution
- Compound can get further tap into Sonic’s $200m+ airdrop programme by integration with our Points programme
Technical Details
Contracts and Infrastructure:
- Deployment of Compound III’s single-asset borrowing architecture, allowing users to borrow against a single collateral asset while mitigating liquidation risks.
- Integration of key assets (e.g., SONIC, USDC, stS) as collateral and borrowable assets.
- Configuration of risk parameters specific to Sonic’s ecosystem.
Proposed Markets
USDC - Bridged Standard
- SONIC
- stS
- solvBTC
USDT - Bridged Standard
- SONIC
- stS
- solvBTC
SONIC
- stS
Risk Management:
- Leveraging Compound III’s built-in mechanisms for isolation of collateral and borrowable assets.
- Utilizing Chainlink oracles for accurate and reliable price feeds.
- Economic risk analysis by Gauntlet
- Conducting rigorous testing and audits of the deployed contracts.
Economic and Market Considerations
Market Opportunity:
- Enhance liquidity and capital efficiency on Sonic.
- Attract users seeking simplified and secure lending solutions.
- Foster partnerships with other DeFi protocols for cross-platform integrations.
- Liquidity and Grant Commitment by Sonic Labs
- Sonic airdrop campaign
Security and Risk Mitigation
- Audits:
Governance and Community Engagement
Community Feedback:
This proposal invites feedback from the Compound community and the broader ecosystem. Key questions for discussion.
- Are the proposed parameters for Compound III suitable for the Sonic ecosystem?
- Should additional assets be considered for inclusion?
Voting Process:
- A governance vote will be conducted following the discussion period. The proposal requires a majority vote for approval.
Conclusion
Deploying Compound III on Sonic represents a significant opportunity to expand the network’s offerings and provide users with a robust, efficient lending platform. Community feedback and participation will be instrumental in ensuring the success of this initiative.
Copyright Waiver
Copyright and related rights waived via CC0 2
