DeFi
Compound, the veteran lending protocol of Ethereum, introduced in August final 12 months the launch of the third model of the EVM-compatible chain, Compound III “Comet” can be utilized for lending, whereas different belongings are mortgage belongings, which can significantly cut back threat and promote capital effectivity.
Comet is one other title for Compound III. Kevin Cheng, Senior Software program Engineer at Compound Labs, explains that Comet will considerably save fuel for customers by not altering the parameters of the protocol.
Every kind of collateral on the platform comes with customized mortgage and liquidation charges, with WETH and WBTC having barely decrease liquidation charges. The USDC market will goal a reserve fund of 5 million USDC and have a minimal mortgage dimension of 100 USDC.
There are presently 4 variations of Compound III, together with lending USDC on Ethereum, Polygon, and Arbitrum and lending ETH on Ethereum.
Compound II makes use of a threat pool mannequin the place customers can borrow any asset. On this mannequin, the protocol is as safe as the one weakest asset, and this will additionally result in unhealthy belongings draining all belongings within the protocol. Presently, lending protocols comparable to Aave additionally work on this means.
Nevertheless, in contrast with the earlier model, the advance of Compound III’s safety mannequin comes at a value, and the collateral supplied sooner or later will not be capable to earn curiosity.
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