Thousands of ETH – Compound is one of the iconic DeFi protocols from Ethereum. Launched in September 2018, this is the 7th protocol of Ethereum in terms of total locked value (TVL). Faced with an important demand, the protocol is about to modify various parameters.
Compound increases the supply cap of WETH
Last August, the teams of Compound unveiled v3 of the protocol. Entitled Comet or Compound III, this new version introduces the concept of supply cap or supply ceiling.
In practice, this parameter defines a limit in the amount that can be deposited on the protocol for a given asset. This limit adds new protections to the protocol.
“Supply caps protect against price manipulation attacks (among other risks) on illiquid tokens that involve providing the manipulable token as collateral. »
On November 30, Paul J. Leiworking for the risk manager Gauntletpublished a change proposal on Compound’s governance forum.
Thus, this proposal aims to double the supply cap of WETH on the USDC market of Compound III. Thus, the supply cap would increase from 75,000 to 150,000 WETH.
“Given market conditions and the fact that ETH supply is near its current cap on Compound III, we support doubling the ETH supply cap to allow for organic market growth. . »
Indeed, the market currently accounts for 74,100 WETH out of the 75,000 WETH that can be deposited. Once 75,000 WETH is reached users will no longer be able to provide WETH on Compound.
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A proposal accepted
After being proposed for proofreading on the governance forum, the proposal was deployed on the governance module in order to be voted on.
For the moment, it has significant support with all 437,000 votes in favor.
Note, however, that of these 437,000 votes, 126,000 come from Gauntlet. Namely the company behind the proposal.
Voting should close within hours of this writing. It’s a safe bet that the proposal will be accepted and deployed as soon as possible.
Although Compound has increased the caps for WETH, not all assets are in the same boat.
At the end of October, the protocol Compound voted to pause 4 markets, namely BAT, ZRX, MKR and YFI. Indeed, faced with the volatility and lack of liquidity of these assets, this opened up an important vector of attack.
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