According to DeFi Pulse, Compound has nearly $103 million worth of crypto locked up in its automated system, which can generate returns for users comparable to interest. Today’s announcement of the Series A follows Compound’s $8.2 million seed round in 2018.
Lending protocol Compound Finance just raised $25 million in a round led by Andreessen Horowitz’s a16z crypto fund, marking one of the largest venture capital investments in a decentralized finance (DeFi) startup to date.
Much like MakerDAO’s loans, users can take collateralized loans with ethereum-based tokens, with the locked assets automatically liquidating if an independent “oracle” determines the price has dropped too low.
Unlike MakerDAO loans, however, the Compound protocol supports multiple assets and allows people to lock up assets without borrowing. Because these assets are stored in a shared pool, even someone with liquidated collateral could claim tokens if they are able to repay the general pool.
Compound founder Robert Leshner said that so far “teams in crypto that have stockpiles of DAI and crypto” are the most frequent protocol users. This appears to correlate with investors’ interests.
Leshner said this recent round will help the San Francisco-based company further “decentralize” the protocol by setting it up so that crypto exchanges and custodians, like Coinbase, can maintain the protocol going forward.
“We’re planning to integrate Compound into as many custodians, exchanges, wallets, and brokers as we can,” Leshner said, “to allow exchanges and custodians to be the interface of the protocol.”
Leshner said Polychain Capital also participated in this recent venture round along with Paradigm Capital and Bain Capital Ventures.
For now, Leshner said the 12-person Compound team is focused on building this public infrastructure for institutions to tap into, rather than finding a unique business model for the startup itself.
“Our goal is to slowly transition the very limited functions that we control to the community over the next two years,” he said referring to exchanges and custodians. “Our highest priority is building something that is sustainable. … From there we could probably build on top of the protocol.”
Whether the startup’s future is to eventually build its own monetized service or exchange, Leshner said the next focus will be on supporting multi-collateral DAI in late November.
Dell Among Founding Members of New IOTA Working Group
IOTA and open-source software foundation, Eclipse Foundation announced Tuesday that the new Tangle EE working group will begin working on projects that can help develop viable commercial use-cases for IOTA’s technology. Tangle is IOTA’s scalable distributed ledger network, which, unlike blockchains, employs a system where users confirm transactions as they send new ones.
A total of 15 companies have joined the working group as founding members, including Dell, German electronics provider STMicroelectronics and the University of Magdeburg.
“The Eclipse Foundation will provide a vendor-neutral governance framework for open collaboration, with IOTA’s scalable, feeless, and permissionless DLT as a base,” said Mike Milinkovich, executive director of the Eclipse Foundation. “By doing so, we will accelerate the development of new applications built with this transformative technology.”
Dominik Schiener, co-founder of the IOTA Foundation, told CoinDesk that multiple companies reported that they wanted to see code tested and reviewed before they themselves would go about integrating it. By enabling thorough testing of Tangle, the working group will be a “major stepping stone” for realizing IOTA’s vision, he said.
The open-source project will help increase access to IOTA’ s technology, according to IOTA co-founder David Sonstebo. Decentralized identities and decentralized marketplaces, which can facilitate real-time trading, and decentralized identities, will be the working group’s initial projects.
Dell believes that data marketplaces will be on the rise by the end of the decade, according to Steve Todd, a fellow at Dell. “By 2030, trillions of dollars of data will be exchanged and one of the reasons for joining Tangle is to help our customers move towards that reality.”
Joining the working group will allow Dell to collaborate on developing solutions, Todd said.