The newest version of decentralized finance (DeFi) pioneer has launched on Thursday with additional features such as user deposit tokenization.
According to Compound founder Robert Leshner, “Version 2 allows the protocol to support every traded ethereum asset, as well as enable developers to more easily build applications on top of the protocol.”
Lending platform Compound obtains its principal from individuals who wish to earn from their cryptocurrency holdings without selling. Rates are determined algorithmically by demand and supply on the protocol. It is an instant way of borrowing crypto at publicly stated rates.
Version 1 enables users to deposit any of five tokens—ZRX, REP, BAT, ETH, and DAI. In the latest version, USDC will be available, and by year’s end, 50 tokens will be available for lending and depositing.
Tokenizing deposits could attract more institutional depositors. Per Leshner, Version 2 will issue a token for every deposit made. BAT deposits will yield cBAT. Those who returned cBAT to Compound will receive their original BAT along with the interest earned by those deposits.
Moreover, Compound has engineered the smart contract in a way that every cBAT is fungible. These tokens are tradeable, but Leshner isn’t expecting many users to maximize that feature early on.
“Institutions aren’t using web apps with MetaMask,” Leshner stated. Instead, he said institutional dev teams can create ways to place their Compound tokens into cold storage, providing greater security.
Interoperability with third-party apps has always been the vision for Compound. Such functionality was improved with the latest version, and it now has various partners that have built the latest version into their apps.
- Zerion will make it convenient to deposit and monitor interest gains.
- Opyn is connecting Compound to Uniswap for seamless margin trading.
- Coinbase Wallet users can view their balance on Compound using the app.
Having an initial backing of $8.2 million, Compound boasts notable investors such as Coinbase Ventures, Polychain Capital, Bain Capital Ventures, and Andreessen Horowitz.
Leshner revealed that more than $100 million moved through Version 1. Regarding Version 2, he stated: “This is the ‘real’ product.”