Compound Unveils $52M Plan to Woo Institutional Clients

Crypto lending protocol Compound is aiming to shift its focus from broad retail lending to an institutional venue, thanks to a $52 million funding plan. The two-year V4 funding plan will be used to build and launch version four of the protocol, with a significant portion allocated for institutional onboarding and liquidity activation.

The existing protocol has already seen significant traction, with around $1.1-1.2 billion in total value locked (TVL) and annualized fees of around $30 million, according to DeFiLlama. However, permissioned crypto lending has struggled to scale, with Aave Arc's TVL sitting at just over $57,000.

The proposed treasury management committee will oversee the funding plan, with a 5-of-7 signer structure and the ability to generate yield until milestones are certified. The budget includes allocations for institutional onboarding and market seeding, as well as a focus on building partnerships and integrations.

Compound's history of governance-related incidents and community friction have raised concerns about the feasibility of the plan. However, proponents argue that the targeted spend and existing liquidity base make it a viable option for institutional adoption.