Compound Foundation has introduced an institutional-only lending market on Compound v3, marking the first product launched under the protocol’s DAO-backed relaunch focused on institutional credit. The new venue separates approved institutional borrowers from retail users by giving them a distinct pool structure, collateral set and lending terms.

The market offers USDC loans against ETH, wstETH, WBTC and cbBTC. Compound said the product was oversubscribed on its first day, though it did not disclose the amount committed.

Separate terms for approved borrowers

The new Institutional Market divides Compound’s liquidity into two tracks. Whitelisted borrowers receive their own collateral list, their own loan-to-value parameters and a designated point of contact, replacing the previous setup in which a fund and a retail wallet could borrow under the same conditions.

Compound has described the product to delegates as an Institutional Comet built under v3.5 and outside the v4 roadmap previously funded by the DAO. According to the Foundation, the launch is intended as a test of an institutional use case rather than part of that separate upgrade path.

Collateral, caps and incentives

The market is limited to four relatively liquid collateral assets: ETH, wstETH, WBTC and cbBTC, with USDC as the borrowed asset. Compound’s argument is that restricting collateral to those assets allows the market to support higher loan-to-value ratios than a broader pool that must account for less liquid assets.

On the access page, Compound lists loan-to-value ratios of 87% for ETH, 85% for wstETH and 81% for both WBTC and cbBTC. Each asset has a $10 million borrow cap. Eligibility begins at 100,000 USDC in deposits, and Compound has earmarked 200,000 USDC in supplier incentives to be distributed pro rata to whitelisted participants over three months, against a $20 million supply cap.

The Foundation has not published liquidation thresholds, reserve factors or the criteria used for whitelisting. Institutions are instead directed to submit a request-access form.

Day-one demand and protocol scale

Compound said the market was oversubscribed at launch. It named DeFi Saver, K3/Nexo, KPK and Yearn as participants, but did not provide a subscription total.

At the protocol level, Compound has $1.53 billion in total value locked and $638 million borrowed against it, according to figures cited in the launch coverage. That places it sixth among lending protocols on DefiLlama, with TVL up 23% over 30 days. Ethereum accounts for $1.42 billion of the total, or about 93%.

Compound also says v3 has operated for four years without an exploit, a statement presented as the company’s own claim.

First public milestone in a larger program

The institutional market is the first product to emerge from the $52 million program approved by the Compound DAO in August. The Foundation relaunched on Aug. 17 with that two-year budget and added four hires from Coinbase, Anchorage, NEAR and Maple. Executive director Schnarch previously served as chief operating officer of Anchorage Digital and chief executive of Coinbase Custody.

The approved budget allocates $28 million to operations and $24 million to growth, but only $14 million has been transferred to the Foundation multisig so far. The remaining $38 million remains in reserve and is tied to milestones, including a staffed engineering team and a production v3 integration kit.

That makes this launch the first milestone met publicly, while any release of the remaining funds is still up to the DAO rather than the Foundation. Compound has said the institutional market is the first in a planned series built around different collateral types and borrower profiles, making the next confirmed step the DAO’s decision on whether further milestones warrant additional funding.

Source: thedefiant.io