Compound Foundation announced the launch of a specialized USDC borrowing market with loan-to-value (LTV) ratios up to 87%, as part of its two-year $52 million institutional capital attraction program. The market supports four types of collateral – ETH, wrapped staked Ethereum (wstETH), wrapped Bitcoin (WBTC), and Coinbase Wrapped BTC (cbBTC). When using ETH as collateral, a maximum LTV of 87% is available, 85% for wstETH, and 81% for WBTC and cbBTC. Each type of collateral has an individual borrowing cap of $10 million. According to Aaron Schnarch, Executive Director of Compound Foundation, the market is launched in an oversubscription mode. Among the participants of the first closing are platforms DeFi Saver, K3, KPK, and Yearn, although specific commitment volumes are not disclosed. Compound promotes the product as an institutional-only market. However, the official market page states that anyone can borrow, while approval is required only for suppliers seeking additional incentives.
The market operates on the Compound v3 infrastructure and is structured around four highly liquid assets, allowing the protocol to offer conditions tailored to the individual risk and liquidity profiles of each, instead of applying uniform parameters to a large number of tokens. Liquidation parameters vary: for ETH, a liquidation ratio of 93% and a penalty of 5% are set, for Bitcoin-backed assets (WBTC and cbBTC) – a ratio of 86% and a penalty of 10%. USDC suppliers receive standard market yield, and approved lenders can claim additional incentives. The reward program provides for the distribution of up to 200,000 USDC proportionally to invested funds over three months with a minimum contribution of 100,000 USDC, with a maximum of 20 million in qualified deposits considered in reward calculations. Participating institutions receive a dedicated contact for support during onboarding, market updates, and other operational issues. Schnarch noted that the market is designed with institutional clients' needs for increased capital efficiency, clearly defined risk conditions, and a high level of service in mind. Marcelo Ruiz de Olano, co-founder and CEO of KPK, emphasized the attractiveness of direct access to a team familiar with institutional requirements.
The institutional market is part of a $52 million two-year development program approved by COMP holders – the largest funding volume in the protocol's history. Of this, $28 million is allocated for operational expenses and $24 million for growth and incentives. At the start of the program, only $14 million was transferred to the fund's multisig wallet, with the remaining $38 million reserved and tied to development metrics. The Compound team includes Executive Director Aaron Schnarch, Chief Operating Officer Christopher Donovan, and Chief Product Officer Steven Liu, who bring experience from Coinbase Custody, Anchorage Digital, Near Foundation, Maple Finance, HSBC, and Broadridge Financial. Founded in 2018, Compound claims to have processed approximately $480 billion in cumulative deposits and borrowing volume – this figure does not reflect current assets on the platform. At launch, the total asset value in the protocol was about $1.53 billion with $638 million in debt, of which Ethereum accounted for about $1.42 billion (93%). However, Compound delegate ugurmersin submitted a sovereignty proposal, demanding the transfer of final control over the market to the DAO: according to him, the treasury management committee administering the market exceeds its mandate, and there is no mechanism for COMP holders to revoke powers. Under the proposal, administrators would have 10 business days to publish a full map of their rights and 30 days to transfer final powers to Compound governance. At the time of publication, the fund has not released an open response to this proposal.