Use Compound with
Bitcoin is a peer-to-peer electronic cash system.
0x is a protocol that enables decentralized exchanges.
Basic Attention Token
BAT is a decentralized ad platform designed for the Brave Browser.
Dai is a decentralized, fully collaterized stablecoin.
Augur is a decentralized prediction market.
Ethereum is a Turing-Complete cryptocurrency and smart contract platform.
USDC is a dollar-backed stablecoin.
Reviews for Compound
Gauntlet Network just released an in-depth stress test of Compound. It’s worth a read. Result: Compound is extremely robust, and could safely scale to 10x the volume with minimal default risk.
They analyze this using agent-based simulations of lenders, borrowers, of liquidators, simulating actual EVM transactions that use a re-creation of the Compound contracts. They repeatedly simulate the worst ever day of Ethereum trading and observe happens to the system.
It's essential that more people do this kind of actuarial risk analysis as DeFi continues to scale. As more and more capital enters into the ecosystem ($1B!), we have to understand the safe boundaries of how far these systems can be stretched.Full review
As far as I can tell, a common problem with most decentralized lending protocols today is that their rates are determined algorithmically or through a voting process.
New protocols where the rates are determined the market will be a key innovation in DeFi....
I should be more explicit and by "market" I mean a classic order book or auction mechanism. Compound and Uniswap are great projects and teams but the current version of the protocol handicaps market participants, especially market makers.
For instance, market makers need to be able to adjust the width of their quotes, in response to the level of adverse selection and volatility. I don't believe this is possible with Uniswap.Full review
Dharma dropped 70% in AMU recently. I think it’s more a lack in confidence in ETH as the asset, reflecting on the leverage market.... Locking up BTC for leverage is more doable as more people will hold BTC.....
Compound’s model is more cost effective than Dharma. I think Dharma will switch to their model soon.Full review
How many times do we have to learn that too good to be true “risk free” returns are always just hidden risk, usually with negative risk adjusted returns. It’s really simple: ask yourself where the returns are coming from.
Compound is totally transparent; you can see exactly where returns come from. It’s meant to be an approximation of a risk free rate, given sufficient collateralization by borrowers (in the same way a repo is close to, but not entirely risk free).
Carried interest is usually totally transparent too. CDOs were too theoretically. “Hidden risk” isn’t literally hidden, it’s just obfuscated and marketed as nonexistent. The “approximation” is off by 14%. There is no real cost of capital here, it’s all risk and friction....
I’m not at all anti-compound or defi. Im very much against investors losing money on shiny derivatives where they don’t understand the risks they’re taking. Carried interest trades aren’t new or interesting as a category. They always look like free money superficially.Full review