Compound Foundation has opened an Institutional Market that offers USDC loans against ETH, wstETH, WBTC and cbBTC, with loan-to-value ratios reaching as high as 87%. The market runs on Compound v3 and is the first live product from the $52 million program approved by COMP holders in May.
Borrowing is open to any user, while access to supplier incentives is more restricted. The Foundation said 200,000 USDC in rewards is available to approved suppliers, with a 100,000 USDC minimum deposit and payouts distributed pro rata over three months against a $20 million supply cap.
Launch details and terms
The new market accepts a narrow set of large, liquid collateral assets: ETH, wstETH, WBTC and cbBTC. On Compound’s market page, ETH carries an 87% loan-to-value ratio, wstETH 85%, and both WBTC and cbBTC 81%. Each asset has a $10 million borrow cap.
Risk settings also vary by collateral type. Liquidation factors range from 93% for ETH to 86% for the two wrapped bitcoin assets, while liquidation penalties run from 5% on ETH to 10% on WBTC and cbBTC.
Compound Foundation said the market was oversubscribed on its first day, naming DeFi Saver, K3, KPK and Yearn as participants. It did not disclose the size of subscriptions.
Part of a broader Foundation program
The Institutional Market is the first public product tied to the two-year Foundation budget that COMP holders approved on May 8 with 1.88 million votes in favor and none against. The measure was executed two days later.
That program totals $52 million, split between $28 million for operations and $24 million for growth. According to the Foundation, only $14 million was initially transferred to its multisig, while the remaining $38 million remains in reserve pending milestones including a staffed engineering team and a production v3 integration kit.
The Foundation identified this market to delegates in July as the first V4 research-and-development comet, built under what it describes as v3.5 rather than the original roadmap. The work is being funded within the V4 program.
Governance structure and institutional focus
The market went live under a Foundation-controlled multisig that Compound governance cannot revoke. That makes the product structurally distinct from markets governed directly through the protocol’s usual onchain process.
Aaron Schnarch, executive director of Compound Foundation, said the launch is intended as a first step toward infrastructure aimed at institutional clients, including greater capital efficiency, clearer risk definitions and a higher service standard. The Foundation also said additional capabilities are planned over the coming months.
Compound has framed this market as the first in a series designed around different collateral types and borrower profiles, suggesting a broader push to expand beyond a single generalized lending venue.
Protocol position and next milestones
Compound currently holds $1.53 billion in total value locked, with $638 million borrowed against it, according to figures cited in the launch announcement. The article said that places Compound sixth among lending protocols tracked by DefiLlama, with TVL up 23% over the past 30 days. Ethereum accounts for $1.42 billion of that total, or 93%.
The Foundation also pointed to Compound’s longer operating history, saying v3 has run for four years without an exploit. At the same time, the larger budget approved in May is still mostly unspent, and release of the remaining $38 million depends on future DAO decisions rather than unilateral Foundation action.
The next confirmed step is governance consideration of later milestones under the May program. For now, the institutional market serves as the first publicly delivered checkpoint under that plan and the first test of whether Compound can grow by targeting specific client needs instead of competing only on rates.
Source: thedefiant.io