Compound III has proposed using USDC on Ethereum. The protocol made this revelation via a blog post stating that the contracts have gone through testing and are ready for execution. According to the announcement, a poll will come up in two days time to seek the approval of community members. This development manifested through the support of Chainsecurity, OpenZepplin, Gauntlet, Certora, and other community members.
Accordingly, the initialization proposal initiates supply caps for five collateral assets. This includes the transfer of 500,000 USDC managed by Compound Governance as initial reserves into the market. If community members approve the proposal, the USDC market will become available on Ethereum.
Further, the initialization proposal will go through three stages divided into seven timelock activities. As revealed, the first five activities are meant to configure the new deployment in order to make the market active. This is possible by enhancing the supply caps of each of the five collateral assets.
Additionally, the next action, the sixth, will see the deployment and enhancement of the newly configured implementation for the market. The last activity will manifest the transfer of ERC20 from timelock to the new market. Thus, including about 500,000 USDC reserves. The purpose of the reserve is to incorporate liquidity and loss cushion for users. Also, it will enable fresh dynamics implemented by the newly-improved interest rate models in Compound III.
Compound Governance determines how the protocol is executed. The Governance has custody over the protocol license 2, its deployment and other things attached to it. However, Compound III should have a significant presence across blockchains and assets. Still, the protocol ought to have a pilot program in a production environment at a minimal level.
Side Notes About Compound III
Compound III is a collateralized borrowing protocol built for security, capital efficiency, cheap gas fee, and simplified governance. Every deployment on Compound III comes with a single borrowable asset. On the protocol, borrowers’ supply collateral is isolated, maintaining them as their property.
Notably, Compound III came into existence after community members of the Compound Protocol accessed the possibility of having a protocol that could run on all EVM compatible chains. On June 29, the protocol introduced Compound III to address these demands.