March 25, 2023

Decentralized lending platform Compound has launched a new “lite” version of its protocol, dubbed “Compound III.”

With an update, Compound (COMP), an algorithmic, autonomous interest rate protocol, is moving away from a centralized risk model where users can borrow any asset, according to a new message. blog post From Robert Leshner, founder of Compound Finance.

Leshner explained,

“at this [pooled-risk] Model (compound pioneered) collateral is constantly being re-collateralized. A single bad asset (or oracle update) can drain all the assets in the protocol.

Instead, each deployment of Compound III has a single borrowable asset. When you provide collateral, it remains your property. It can never be withdrawn by other users (except during liquidation). Capital efficiency also increases – collateral is more “useful” when you know ahead of time which asset is being borrowed. “

creator Say The upgrade will make Compound cheaper, faster, safer and more efficient. The first deployment of Compound III will enable users to borrow USD Coin (USDC) with Ethereum (ETH), Wrapped Bitcoin (WBTC), Chainlink (LINK), Uniswap (UNI) and COMP as collateral.

At the time of writing, COMP is trading at $46.81. The 122nd-ranked cryptoasset by market cap is down nearly 9% in the past 24 hours and is still down nearly 95% from its all-time high of $910.54 set in May 2021.

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