Crypto17 August, 20262 min read
Compound Approves $52 Million Budget, Overhauls Leadership to Attract Institutional Investors
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Compound approved a record $52 million budget to target institutional investors. Leadership team was replaced as it pivots from retail toward institutional users.
6 outlets told this the same way.
Compound’s $52M pivot
Compound Finance approved a $52 million budget and overhauled its leadership as the DeFi lender looks to attract more institutional investors after assets locked on Compound fell to about $1.2 billion from a peak of $12 billion in September 2021. CoinDesk said the protocol replaced its leadership team and approved the $52 million budget on Monday to attract new capital after the value of assets locked tumbled to $1.2 billion. Coin Edition reported that Compound plans to focus on real-world assets, partnerships and credit infrastructure for traditional financial institutions.
CoinDesk said Compound will now focus on attracting institutional users and will offer real-world assets, partner integration and credit infrastructure for traditional financial markets. Coin Edition said Compound helped pioneer DeFi lending after launching in 2018 and has since processed about $480 billion in deposits and borrowing.
New leadership, institutional bar
Coin Edition said Compound’s new leadership includes Christopher Donovan, Steven Liu and Aaron Schnarch, the former CEO of Coinbase Custody, and that executives from Anchorage Digital, HSBC, Broadridge Financial and Maple Finance have also joined the team. CoinDesk reported that the new team includes Chief Operating Officer Christopher Donovan, who previously held the same role at the Near Foundation, and that Steven Liu joins as chief product officer. Coin Edition quoted Aaron Schnarch saying institutional adoption has been limited by gaps between DeFi products and traditional finance standards.
CoinDesk quoted Schnarch saying "DeFi is a remarkable innovation; however, it has achieved limited institutional adoption" and that current product offerings fall short of meeting the traditional finance bar. CoinDesk also included Gal Stern’s view that "Now is a great time for initiatives like these" where institutional minds can explain risk to a risk committee.
DeFi demand and market context
Coin Edition said the move comes as the broader DeFi market faces weaker demand, lower yields and security exploits, with sector-wide total value locked falling by more than a third this year to about $70 billion.
CoinDesk said TVL across the sector has fallen by more than a third since the start of the year to roughly $70 billion, driven by a broad correction in the crypto market, compressed yields and a run of protocol exploits, including the $292 million KelpDAO hack in April.
CoinDesk reported that Aave holds more than 11 times Compound’s total, with $14.8 billion, and that Compound has lost ground to larger rivals.
Coin Edition said COMP rose 11% over the 24 hours to $17.97 as of Aug. 18.
CoinDesk said the sector is forecast to reach $2.7 trillion by 2030, with tokenized real-world assets among the fastest-growing segments, according to a Standard Chartered projection.