Compound allocates $52 million for institutional DeFi focus

DeFi protocol Compound announces a new leadership team and a $52 million development programme approved by the DAO. It is the largest programme in the history of the protocol and focuses on offering institutional lending through the blockchain. According to Compound, banks, asset managers and fintech companies are showing increasing interest in such services, but often lack the knowledge to build this themselves.

In short:

• Compound announces a $52 million development programme, approved by the DAO.
• A new leadership team with experience in traditional financial markets and digital assets takes the helm.
• The protocol has processed around $480 billion in deposits and lending volume since 2018.

New team with a background in traditional finance

Aaron Schnarch takes on the role of chief executive officer. He is joined by Christopher Donovan as chief operating officer, Steven Liu as chief product officer and Leo Eikelman as chief technology officer. The four have previously built institutional infrastructure at both traditional financial institutions and companies in the digital asset sector.

Compound states that DeFi is now mature enough to serve financial institutions that are unwilling or unable to build their own infrastructure for blockchain-based lending.

Institutional products and major ambitions

With the released budget, Compound wants to develop products specifically aimed at institutional parties. This includes, among other things, support for real world assets (RWA), improved capital efficiency and integration options that allow financial institutions to offer onchain lending services in their own environment.

Compound was launched in 2018 and has since processed approximately $480 billion in deposits and lending volume. With this new direction, the protocol is aiming for a broader role within the institutional financial landscape, where demand for onchain credit solutions is growing according to the protocol.