Compound Labs announced that they launched a new DeFi focused product called Compound Treasury for institutional entities and businesses on Jun 28. The aim is to offer a respectable 4% fixed interest rate without requiring them to delve into the complex workings of the protocols. This will allow an influx of new money into DeFi, at a time, when yields in traditional finance are drying up and investors are looking towards new areas. Compound calls it the race to onboard the next billion DeFi users.
The renowned lending/borrowing protocol with an excellent track record and reliable performance will utilize the USDC stablecoin to allow institutional entities and businesses to create a treasury on-chain and manage their funds whilst earning interest. It targets those who have no previous exposure to crypto-based services. Compound claims to offer 24 hours deep liquidity, fixed-rate interest paid daily, and transparent analytic features.
Compound Treasury came to be through coordination with Fireblocks. The latter is the institutional digital asset management service and Circle behind USDC. Institutional entities and businesses don’t need to worry about private key management, conversion problems, and notorious crypto volatility. Users can simply set up an account, wire USDC, and start earning interest. There’s no vesting period and the whole process is regulatory compliant.
Compound is a community governance-based decentralized DeFi protocol, which allows users to lend or borrow assets against collateral. The users can supply assets to the liquidity pool to earn continuously compounding interest. It’s paid by the borrowers, looking to make use of the funds. The governance token used is COMP, which allows holders to vote on important parameter changes and adjustments, in the system.
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