Compound Launches Institutional Lending Market with Higher Loan-to-Value Ratios
Compound Foundation has launched an institutional-only lending market, three weeks after relaunching its protocol to accommodate institutional credit. The Institutional Market separates Compound's liquidity into two pools: one for whitelisted borrowers and another for retail users.
The new market allows institutions to borrow USDC against ETH, wstETH, WBTC, and cbBTC collateral at higher loan-to-value ratios than the existing pool. For example, the protocol reports an 87% LTV ratio on ETH, 85% on wstETH, and 81% on both WBTC and cbBTC.
The Institutional Market is the first product to ship out of Compound's $52 million budget approved by its DAO in August. The Foundation has set aside $14 million for operations and growth, but the remaining $38 million sits in reserve against future milestones, including a staffed engineering team and production v3 integration kit.
Aaron Schnarch, executive director of Compound Foundation, said the new market is designed to meet institutional client demands, including better capital efficiency, clearly defined risk, and higher service standards. The market has been oversubscribed at launch, with companies like DeFi Saver, K3/Nexo, KPK, and Yearn participating.