The DeFi protocol approved a $52M milestone-gated budget and a new leadership team to build on-chain credit infrastructure for banks, asset managers, and fintech firms.
Alpha Score of 31 reflects weak overall profile with poor momentum, weak value, poor quality, weak sentiment.
Decentralized finance protocol Compound has secured a $52 million two-year development allocation, the largest funding commitment in its history, to build infrastructure for on-chain credit services aimed at traditional financial firms.
The Compound decentralized autonomous organization approved the program, which is structured to release funds in stages tied to predefined milestones. Roughly $14 million becomes available immediately. The balance is gated.
Of the total, $28 million is designated for operational and engineering work, including development of Compound V4. The remaining $24 million supports growth activities, with $8 million to $10 million specifically prioritized for institutional partnership development rather than conventional liquidity-provider rewards.
Aaron Schnarch, previously chief executive of Coinbase Custody, takes the role of executive director. Christopher Donovan, former chief operating officer at the Near Foundation, joins as COO. Steven Liu, who scaled Maple Finance's assets from $500 million to $5 billion, becomes chief product officer. Leo Eikelman has been appointed chief technology officer.
Compound launched in 2018 and has processed roughly $480 billion in deposits and borrowing activity with zero bad debt. Its codebase is one of the most widely forked in the sector. But total value locked has fallen from a 2021 peak near $12 billion to approximately $1.2 billion, pushing the protocol to shift away from retail-focused yield incentives.
Compound V4 introduces a hub-and-spoke architecture designed to centralize capital allocation through a core hub. The model aims for tighter risk controls and better capital efficiency, features professional counterparties typically require. The roadmap also includes native support for real-world assets, integration tools that let institutions embed on-chain lending into their own platforms, and compliance features for regulated entities.
More than ten partners have already committed, with discussions underway involving over twenty additional organizations. Initial institutional-grade products are expected to roll out in the coming weeks.
The team said banks, asset managers, exchanges, and fintech firms increasingly want to offer on-chain lending but often lack the specialized expertise to build the infrastructure themselves. Compound is positioning itself as a ready-made solution with years of operational history.
The Compound Foundation announced the plan on Aug. 17.
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