Summary
- Compound Finance overhauled its leadership and approved a record $52 million budget as it seeks to revive growth after its total value locked fell to $1.2 billion from a $12 billion peak in 2021.
- The protocol is pivoting toward institutional clients by developing real-world asset offerings, partner integrations and credit infrastructure designed to meet traditional finance compliance and technical standards.
- Industry executives say the new leadership team and sizable budget align with a broader shift in DeFi toward serving financial institutions, after the sector’s overall assets declined amid market weakness and security exploits.
Compound Finance, one of the oldest decentralized finance (DeFi) lending protocols, replaced its leadership team and approved a $52 million budget on Monday to attract new capital after the value of assets locked on the platform tumbled to $1.2 billion from a peak of $12 billion in September 2021.
The company stated it will now focus on attracting institutional users and will offer real-world assets, partner integration and credit infrastructure for traditional financial markets.
Compound pioneered decentralized lending when it started up in 2018, popularizing the concept of earning yield on crypto deposits without intermediaries. It stated it has processed roughly $480 billion in deposits and borrowing volume since its inception. Over the past few years, it has lost ground to competitors such as Aave, which holds more than 11 times its TVL with $14.8 billion, DeFiLlama data shows.
