Proposal : Real World Asset (RWA) asset markets on Compound

Grants
5

@adam
There are 3 tokens - Real World Assets (RWA), Collateral assets, Base assets.

RWA tokens may not be liquidated on demand, but they may pay off higher interest rates. Collateral asset tokens posted for RWAs can be existing tokens accepted on Compound such as WETH. We may not need a new collateral token to support RWAs.

The Comet extension for RWA Markets could have features

  1. to let RWA issuers (asset managers or owners) post asset details, post collateral to Compound and borrow from Compound.
  2. to let RWA extension users view RWAs, put up any collateral that is required to be filled in for such RWAs that is already not posted by the RWA issuer.

The benefits will be

  1. For RWA issuers : access to liquidity on Compound in the form of loans of base assets.
  2. For RWA Comet extension users : benefit by higher interest rates paid by RWA issuers (ie, if a RWA is paying 12%, and the base asset cost of capital is 4%, RWA Comet extension users who post any collateral would earn the balance 8% from RWA issuers).
  3. Compound protocol : more liquidity (ie, more collateral + base assets on chain).

After reading the Comet code and also noting that there is a cap of 15 collateral/base asset pairs (can you confirm this?), its best that we do not introduce any new collateral tokens that would require voting / governance to approve.

We could still have some social engagement on the extension by letting COMP delegates vote on admitting RWAs on the new market, but this is something we can check the community’s views on first before implementing.