Compound approves $52M DeFi budget as COMP targets $20

Compound's DAO approved a $52 million budget and new leadership on Aug. 17, lifting COMP 8.2% to $17.57 as the protocol pivots to institutional credit.

"Current DeFi products fall short of meeting the traditional finance bar," Aaron Schnarch, executive director of the Compound Foundation and former CEO of Coinbase Custody, said.

The two-year program splits $28 million into operations and $24 million into growth and incentives, with only $14 million released at commencement. The remaining $38 million sits in a reserve wallet controlled by a five-of-seven multisignature Treasury Management Committee, released only after the foundation meets development and institutional adoption milestones.

The first institutional-grade product ships "in the coming weeks," per the foundation, with a $20 COMP target in view if demand holds.

The leadership overhaul brings four executives into the protocol's management structure. Christopher Donovan, former COO of the Near Foundation, becomes chief operating officer. Steven Liu, who scaled Maple Finance from $500 million to $5 billion in assets, takes over as chief product officer. Leo Eikelman joins as chief technology officer.

The budget funds a roadmap built around institutional credit onchain, including real-world asset (RWA) integration, capital-efficiency improvements across lending markets, and tooling that lets financial institutions embed onchain lending into their own platforms. Compound said it has processed roughly $480 billion in cumulative deposits and borrowing volume since its 2018 launch, with zero bad debt.

The pivot comes as Compound's total value locked has fallen to about $1.25 billion, down from a peak near $12 billion in September 2021, per DefiLlama. Ethereum accounts for roughly $1.14 billion, or 92 percent, of the current total, with about $575 million in active loans. Aave V3 holds $14.4 billion and Morpho Blue $8.1 billion, placing Compound sixth among lending protocols tracked by DefiLlama.

COMP's exchange supply ratio crashed to a three-month low of 0.12, indicating tokens have flowed out of exchanges, while the relative strength index climbed to 65. The altcoin flipped its 20- and 50-day exponential moving averages, a setup that typically precedes further gains.

Ran Hammer, chief business officer at Orbs, said retail participation across DeFi has thinned considerably, with blockchain networks increasingly serving as settlement venues for financial institutions rather than retail-first platforms. The emphasis on RWA support and compliance-ready integration tooling could differentiate Compound from rival lending protocols, though its impact on TVL recovery may only become clear once the first products ship.

The strategy places Compound in direct competition with Aave, which expanded its institutional lending infrastructure onto Avalanche in July, and Euler, which added VanEck's tokenized Treasury fund as collateral in May.

This article is for informational purposes only and does not constitute investment advice.