TL;DR
AlphaGrowth proposes the early renewal of the Compound Growth program for a tenure of 12 months.
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With Compound’s shift toward a further decentralization, AlphaGrowth requests a new agreement to align with the DAO’s further decentralization of the protocol. We encourage other Compound service providers to do the same.
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The scope of what AlphaGrowth has been responsible for handling has exceeded our original Growth Program mandates. While we’ve been running the growth program we continue to uncover new activities that are required for compliant, sustainable, DAO operation and handle quite a few outside our original purview. An increased scope has used our funding faster than expected.
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With the departure of key resources from Compound Labs and Labs stepping away from key responsibilities, these responsibilities fallen to the Growth Program. We need to further expand our mandate to reflect these responsibilities. You can reference an itemized list of responsibilities required to successfully run Compound curated by key Compound resources. You can request access here: we are limiting access to service providers to retain advantage over our lending competitors. If you request, please include a message with your affiliations and what you’d like to know.
Our focus will remain generating TVL, users, borrowing activity and ultimately increasing the treasury of the protocol. $710M in TVL has flown into Compound through AlphaGrowth’s initiatives to add new markets, new chains, and incentive campaigns. [DUNE Analytics] We will continue these strategies as well as dedicate personnel to DeFi operations, rails to TradFi, and hedge fund deals, as three additional channels each with the potential to bring an additional $1B in TVL to Compound Protocol.
Contents
- TL; DR;
- Wins
- Why Renew Compound Growth?
- Priorities and Plan for Growth
- Path to a Profitable Sustainable Compound
- Business Unit Budget Breakdown
- Wholistic Security
- Community
- Expansion Units
- New Assets & Markets
- New Chains
- Incentive Distribution & Structured Products
- Treasuries as Hedge Funds
- DeFi Operations
- Road to TradFi
- Budget Summary
- Our Processes
Wins
AlphaGrowth ran a trial phase growth program from December 2023 to April 2024. Here are the details on its outcomes which include among other things launching Compound on Optimism, and securing a $3 Million grant from Arbitrum.
The trial was then rolled into a 1-year growth program. From May 2024 until today the program has the following high level achievements. [For additional details check out our latest Quarterly Report]
Quantitative Wins
We passed our 1-year milestone to acquire $500M in new TVL in the first 6 months. We added $715 Million in new TVL through AlphaGrowth initiatives. [Dune Dashboard] by WOOF!
11 New markets were added & 74 new collaterals added to markets across 57 DAO proposals.
AlphaGrowth’s impact on Compound [Dune Dashboard]
Compound deployed on the Mantle blockchain with three more blockchains are deep in the pipeline.
Incentives secured for Compound: $1M in MNT from Mantle, 200K OP from Optimism
Incentives distributed to Compound users: Systematically distributed 1.8M ARB brought $260M TVL on Arbitrum. This secured the best LTIPP program outcome for TVL return on incentives distributed at scale, and solidified a strong relationship for future Arbitrum Grants.
Here’s our analytical growth approach, which you can see reflected in the actual LTIPP performance above.
Qualitative Wins
The Growth Team also designed & commissioned the build of a decentralized frontend to help decentralize the Compound ecosystem and ensure faster iteration & product development.
V1 of the frontend designs are up and ready for beta testing, decentralized hosting is still in progress, there are two possible paths, the first is via IPFS, however IPFS has a variety of limitations our partners have discovered can be solved via another solution. Watch @Nextosi for a post coming shortly.
Over 3 days, AlphaGrowth led negotiations with Humpy over proposition 289. The AlphaGrowth team was able to attain a peaceful resolution to benefit all parties involved when faced with a classic prisoner’s dilemma. The team at Balancer was impressed that we quickly wrapped up a situation that could have dragged Compound into months or years of uncertainty. (The outcome protected the Compound Treasury from a potential $25 million loss and potentially the entire market cap of the COMP token currently valued at $837 Million)
We have facilitated numerous discussions around the possible designs for a Staked COMP token and will continue to explore and support the initiative with community support.
Through the distribution of incentives as marketing we have formed close relationships with valuable partners like:
- Vaultcraft: Incentivized with Arbitrum LTIPP to generate $16M TVL. Currently incentivizing with another $150K with Optimism grants for lend and loop vaults
- Contango: Distributed ****$110K Incentives for LRT loops. Additional $100K to be distributed during December 2024 and January 2025 for loops
- dHedge: Incentivized wETH Supplies with $100K in ARB
- OKX DeFi: Incentivized vaults that increased Compound TVL by $90M
- Crypto[dot]com DeFi wallet: Brokered deal to add Compound vaults onto Crypto[dot]com and Trust Wallet. Incentivized with $100K split 50/50 by TrustWallet and Compound to supply OP wETH.
- Wormhole: Co-Incentivized bridging into Arbitrum Vaults on Compound with $25K
- Merkl: $25K in ARB used to boost APR by 2.7% on $22M TVL on Compound
- Layer3: $25K in ARB used to incentivize social engagement and lending using compound.finance
- Fonbnk: Incentivized underbanked in Sub-saharan Africa to open saving accounts using Compound ($10K incentives)
- Beefy: Distributed $50K over 10 weeks to incentivize looping USDC, USDT, and wETH on Optimism.
- Renzo: $25K OP to incentivize looping ezETH on Contango
- Ether.Fi: Provided $100K to incentivize weETH looping
- Lido: Received $50K Co-Incentives that were distributed to incentivize wstETH looping
- Torque Finance: Distributed $15K to incentivize wBTC looping
- Master Card: Pending Renewal
Constant marketing experiments have helped Compound Grow. Through our efforts so far we have generated over 53 million views and fostered partnerships that have enhanced our Compound’s reputation and outlook. Looking ahead, we’re committed to a marketing strategy that emphasizes Compound’s stability and reliability, while collaborating with reputable partners.
Why Double Down on Compound Growth Now?
- Compound from steady state into a dynamic protocol
- Bitcoin is nearing $100,000
- macro trends indicate the approach of the next bull market
- Compound needs fast-paced era of execution & partnerships.
Re-investing in the Growth Program ahead of this next wave in the market will prepare Compound to take advantage of every opportunity the Protocol is offered. (These include big traditional finance, new well funded chains, & other financial instruments) When AlphaGrowth started the Growth Program we had 14 high-value opportunities. We now have 93. We’re approached with more each day and are forced to filter out great opportunities because we’re at capacity to execute.
We have a proven track record with the DAO, and like a high-performance vehicle requires a skilled driver to navigate the path ahead, we are still uniquely equipped to steer this initiative towards success.
Priorities and Plan for Growth
Stated Priorities & Outcomes from the previous period.
| Mandates | Goal to increase by | Actual |
| Total Value Locked (TVL) Expansion | $500M | +$750M |
| Market Development | 8-15 | 11+ WETH Scroll & WBTC in pipeline |
| Chain Expansion | 4-6 | +2 with 3 in pipeline |
| User Acquisition | 25,000 | 263,190 |
| Strategic Partnerships | Qualitative | 10+ large partners |
| Infrastructure Expansions | Qualitative | 3 new oracles & more |
we are expanding our attention to:
- Prove out new $COMP reward strategies with the goal to drive >$100M net new TVL per $1M in COMP incentives…
- DeFi Operations: Significantly improve COMP on-chain utility and velocity
- Hedgefund with Treasuries: Teaching external treasury partners why to include Compound in their treasury management strategy:
- Building Rails to TradFi: Build pathways for large non-crypto native institutions to use Compound in their trading strategies. With the goal that three organizations with the potential to deposit $1B on Compound and greater than $10B in Assets under management will be privately auditing Compound by the end of the year as a safe location to deposit their funds.
Budget Request Breakdown by Business Unit
Our budget ask is neatly segmented into eight essential business units, each crafted to bolster various facets of Compound’s growth and operations.
- Wholistic Security
- Community
- New Assets & Markets
- New Chains
- Incentive Distribution & Structured Products
- Treasuries as Hedge Funds
- DeFi Operations
- Road to TradFi
And three working capital buckets.
- Marketing Budget
- Grant Budget for Builders
- COMP Incentives to distribute
Let’s dive into the details:
Wholistic Security
Thesis:
Compound’s reputation hinges on the security of its assets and governance. With over $2.7B in funds, we must ensure the protocol remains the safest place for whales and institutions. Risks like bankruptcy, legal issues, governance takeovers, or frontend exploits threaten the protocol’s viability. With Compound Labs’ reduced involvement, remaining service providers must increase their responsibilities and remain vigilant about their compliance to financial regulations and legal obligations to maintain Compound’s continued success.
Main Activities:
- Financial
- Hire a fractional CFO whose responsibilities are:
- Remain compliant & handle funds (Incentives, partnerships, etc …)
- Help partners provide liquidity loans on/to Compound
- Maintain Growth Program accounting
- Hire a fractional CFO whose responsibilities are:
- Legal
- Hire a fractional Lawyer whose responsibilities are:
- Advise the team to take actions that are believed to be legally compliant.
- Review partner contracts before signing, for i.e.: Mantle
- Hire a fractional Lawyer whose responsibilities are:
- Security
- Hire a fractional CSO whose responsibilities are:
- Security vendor management
- Provide team members with best practices against getting Phished or hacked
- Protect social accounts from getting hacked
- Hire a fractional CSO whose responsibilities are:
- Website Frontend Operations
- Continuous improvement and development on the Frontend website.
- Continuous improvement on decentralized hosting standards & security.
- Fund PRC node providers for the decentralized frontend. Compound Labs currently pays $20-25K/month for the 100M+ daily requests to RPC nodes via compound.finance
Business Unit Annual Cost: 20,650 COMP
Community
Thesis:
Blockchain companies cannot grow successfully without partners, community members, and a strong userbase. The following community team is designed to acknowledge and understand how Compound Protocol can help anyone who reaches out for help, partnership, etc … While the growth program has a backlog of large initiatives, everyone in the community deserves to be heard and helped. This team will also interact with community members of tangential communities like the chains on which we’re deployed to make sure Compound takes full advantage of the grant & partnership opportunities available (and that we qualify as strong supporters of those communities).
Main Activities:
- Community Support: Technical developer with Compound ABI & frontend knowledge to help users in difficult situations
- Receive Grants: Write grant applications & lobby the correct delegates in different ecosystems (for example lobbying in Arbitrum has brought in $3M in grants so far)
- Governance Participation: Read governance posts & respond with opinions in the best interest of the community
- Identify talent like the Compound DAO’s CTO that will better the ecosystem
- Content writing for Marketing & Forum initiatives
Business Unit Annual Cost: 19,000 COMP
Expansion Business Units
Expansion units are constructed as sales teams, with seasoned sales leaders with access to capital, partnerships & relationships in the blockchain space.
New Assets & Markets
Thesis:
Researching highly desirable assets and market constructions, can lead to large inflows of TVL with minimal programming and product expansion. For example, comparing Compound to competitors showed that USDT markets on competitors were a great opportunity for expansion. When Compound added USDT on Mainnet it drew $200M in TVL with little to no marketing.
Past Performance:
- USDT on Mainnet: brought $200M TVL with little to no marketing
Main Activities:
- Lending Markets competitive analysis
- New asset research: speaking with asset teams and their investors
- New asset listing operations
- New market construction
- Pushing to increase leverage on isolated markets
- Pushing to create markets for higher risk/centralized assets like Paxos Gold.
Goal:
- Add $500M in TVL to Compound by adding new collateral assets and markets to existing chains on which Compound is deployed.
Business Unit Annual Cost: 9,200 COMP
New Chains
Thesis:
Compound can expand to multiple blockchains and receive incentives from each. Each new expansion is an opportunity to increase Compound’s footprint with a new Community, new investors both institutional and commercial, and co-market into new regions alongside the blockchain.
Past Performance:
- Arbitrum, received $3M in Grant incentives distributed for free Ad Budget.
- OP, received $600K in Grants to distribute for Marketing Compound
- Mantle
- Received $1M in Grant incentives & marketing support
- Carry Trade Negotiated to benefit Mantle Treasury
Main Activities:
- Research which blockchains can work with Compound
- Generate deals that make it possible for Blockchains to increase their TVL to work with Compound. Treasury deals, Atomic Liquidation from Treasury, etc …
- Work with ecosystem projects on roadmap chains to get TVL guarantees to increase certainty that new deployments get to profitability/sustainability
- Negotiate deployment contracts, map chain needs, desires, & decision makers.
- Accounts receivable, make sure chains keep their word & distribute promised incentives & liquidity loans.
Current Expectations & Roadmap:
- Linea, Ronin, Ape Chain
Goal:
- Add 4-6 blockchains to Compound over the next year that are structured to be revenue positive for the DAO, either through treasury deals like that being negotiated with Celo, or through reserve growth from sufficient TVL growth & utilization.
Business Unit Annual Cost: 12,300 COMP
Incentive Distribution & Structured Products
Thesis:
- We can use
Past Performance:
- Arbitrum: brought $260M in TVL
- Mantle: Partnerships built with 4 large CEXs ready to distribute incentives when ready
- Meaningful partnerships created: OKX, Vaultcraft, TrustWallet, ByBit, Binance,
Main Activities:
- Distribute partner chain incentives → Replicate LTIPP successes with growth strategies
- Working with structured product partners to create & execute incentive marketing campaigns.
- Experiment distributing COMP with growth strategies to gauge its effectiveness
- Optimizing the Compound Decentralized Frontend for incentive distribution.
- Pushing new Compound reward contracts. V2, V3.
- Profitability analysis: Working with Gauntlet to collectively apply experimental results to increase COMP reward distribution methods.
- Design and promote new structured products with sustainable incentive sources, which extend beyond growth campaigns.
Images
- Slide showing how we distribute incentives per week, to prevent mercenary capital
Goal:
- Bring $1B in new TVL to Compound through incentive programs distributing tokens from partner blockchains as well as COMP token. Given this renewal the Incentive team will have $2 million in starting incentives to distribute $1M from Mantle & $1M in COMP, further incentives will be negotiated by the New Chains team & managed by the incentives team.
Business Unit Annual Cost: 11,600 COMP
Treasuries as Hedgefunds
Thesis:
Treasuries have $0 carry for their own native asset, nullified by diminishing returns and limited liquidity. Putting assets to work creates yield-bearing token sinks, that net diversification of treasury assets, significantly raising their real value, and replacing potential sell-pressure with potential buy-pressure.
Past Performance:
- New area of the team, but with robust partnerships in all areas of DeFi
Main Activities:
- Teaching external treasury partners how they can get returns for their DAO/Foundation/ecosystem with strategies that involve depositing treasury funds into Compound.
- Using treasury activities to facilitate growth to the Compound app and ecosystem
- Managing liquidity deals and vault strategies
- Liquidity and risk analysis for negotiating deals in conjunction with Gauntlet
- Reporting on treasury deal performance, composition, and active positions to Compound delegates
- Potentially involve Compound Treasury assets in these deals when the risk-adjusted return for the treasury justifies involvement.
Current Expectations & Roadmap:
- Structure and execute deals that net fees, incentives, and possibly fixed income to partner treasuries & possibly the Comp treasury.
- Spot liquidity deals that net both fees and incentives to the treasury
Goal:
- Increase TVL in Compound markets from DAO Treasuries
- Raise the carry of the Treasury by 50%+
Business Unit Annual Cost: 11,700 COMP
DeFi Operations
Thesis:
Through better DeFi Operations and integrations, demand and utility for the COMP token will grow, while circulating supplies sink. This will help facilitate a flywheel that grows the Treasury, TVL, and inbound dealflow.
Main Activities:
- Design new potential utility for the COMP token, such as stakedCOMP
- Negotiate and underwrite equitable liquidity deals
- Strategically time new listings and incentives to best facilitate token velocity
- Integrate with bridges and perps markets
- Create new opportunities for COMP as collateral for stable coins and other CDPs
- Facilitate partnerships that lead to unique dealflow such as carry-trades, that lead to both velocity and TVL growth
- Portfolio management/reporting for all operations
Current Expectations & Roadmap:
- Pools on 5+ chains
- Priority partnerships with top bridge partners
- New positions for COMP as collateral in prestigious DeFi applications
Goal:
- Grow the COMP Treasury
- Significantly improve COMP on-chain velocity
- Significantly improve COMP on-chain utility
Business Unit Annual Cost: 11,900 COMP
Road to TradFi
Thesis:
We believe the largest market opportunity for Compound lies in creating a bridge between traditional finance and crypto platforms to attract significant institutional capital to the platform. We have multiple direct forms of confirmed interest from TradFi partners who have serious interest in placing billions of dollars into crypto-backed fixed income solutions, but scalability and trust are current challenges. Developing independent, trusted relationships with institutional players and integrating scalable solutions over the next 2–3 years will be essential in achieving this goal. Crypto remains a niche market compared to TradFi, with the latter requiring rigorous audits, custodian relationships, and risk mitigations to transition into crypto-backed instruments.
Past Performance:
Existing relationships include connections with CoinFund and other market makers interested in fixed income products for Ethereum ETFs. While no substantial TradFi investments have been secured, previous engagements at conferences, like the Padfi Fixed Income event, demonstrated strong institutional interest in exploring opportunities.
Current Expectations & Roadmap:
The immediate goal is to establish foundational relationships and technical infrastructure to facilitate TradFi involvement. Over the next 12 months, milestones include initiating the first technical audit and securing three partnerships with funds managing over $10 billion, with the potential to deposit substantial capital onto crypto platforms. Progress will involve deepening relationships with 50 TradFi institutions, leveraging both technical and interpersonal strategies.
Main Activities:
- Architecting the process flow for onboarding TradFi capital, including fiat-to-crypto conversion, custodial relationships, and counterparty governance.
- Identifying and collaborating with reputable OTC desks, market makers (e.g., GSR, Wintermute), and custodians (e.g., Fireblocks, Qredo).
- Conducting security and technical analyses to address institutional requirements for trust and risk management.
- Building personal relationships and fostering trust with TradFi stakeholders to overcome existing barriers.
- Assisting TradFi teams to hire and structure in house engineering teams to audit and validate technical platforms.
Goal:
To lay the groundwork for institutional participation by establishing trust, technical readiness, and strategic partnerships. By the end of 12 months, have three high-profile partnerships with firms able to deposit at least $1B into Compound, an active audit process, and tangible progress toward long-term adoption of crypto-backed fixed income solutions by TradFi players.
Business Unit Annual Cost: 11,700 COMP
Working Capital
Marketing Fund
Our marketing fund will remain the same as the previous period. We have allocated 1542 COMP/month to drive demand through dynamic events and campaigns highlighting new integrations and deployments within the Compound ecosystem.
What is Important:
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Wholistic Security: AlphaGrowth is able to operate with maximum safety by delegating access to team members without allowing them to directly log into Compound associated accounts.
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Brand Positioning: Compound is a critical piece of DeFi infrastructure. As such it has generated its highest engagements from Comarketing with reputable brands.
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Community Growth: Collaborate with voices that connect with the community to inspire community involvement
For more information on how AlphaGrowth views marketing for Compound, please read this document which will soon be adapted to the forum before EOY.
What are we measuring:
Post Quantity: 545
Post Views: 54,000,000
Post Engagements: 390,000
Notable Engagements:
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Chains: Optimism, Arbitrum, Base, Mantle.
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Structure Products: OKX, VaultCraft, Contango, Cian, dHedge, Merkl.
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Key Thought Leaders of DeFi:
Community Mentions: 400% Growth in past 30 days
User and TVL Growth:
+500% Unique Address Growth
Integration Grants Fund
Our Integration fund will remain the same as the previous phase of the Growth Program (Phase 2). Set at 1542 COMP/month, it will focus on expediting development and funding strategic initiatives that enhance Compound’s infrastructure and capabilities. To build up on this, we are now solidifying the requirement for an Integrations fund to swiftly fund strategic initiatives that otherwise would not be funded due to multiple limitations. (like CGP ceiling of $50K for Grants)
Past performance: The previous period’s integration fund was used to augment Compound Protocol by funding the following technical development (programming) initiatives:
- Optimism deployment
- Mantle development & deployment which helped secure a $1M MNT grant for Compound.
- Increasing comet collateral capacity to 24 assets
- 4626 wrapper development and deployment
- RewardsV2.scope is under audit.
- LTIPP Execution
- Decentralized Front End.
- LST and LRT adjustments
And more, including the following in progress:
Position Migrator. The migrator initiative was inspired by the first migrator, which lacked functionality. The new version of the migrator will support the migration of the positions from AAVE V3, Spark, and Morpho and cover all the markets and chains. Also, the migrator will support collateral swap in case the Compound market does not support it. The migrator functionality will be integrated into the new Frontend interface.
COMP Incentives
Our goal is to test & prove the effectiveness of new distribution methods and Channels for COMP incentives that will drive sticky TVL onto the protocol. Our goal is to work collaboratively with Gauntlet and share what we find such that the $10M/year they distribute can be used in the most effective way possible. We seek the ability to distribute 1542 COMP in order to measure its effectiveness on the Market. (An amount equivalent to the marketing budget) This responsibility would be handled by the Incentives team who has already acquired and distributed millions on behalf of the protocol. The APR incentives will have the flexibility to be tested across all Compound’s existing chains whereas new chain deployment incentives can only be used to benefit the chain from which they were granted.
Past performance:
AlphaGrowth has set a precedent managing the distribution of $1M of ARB incentives which brought $260M TVL onto Compound. We are currently in charge of distributing ~$1M OP on Optimism, and $1M MNT on Mantle to start soon.
