Compound announces new protocol features, ability to borrow more assets in the coming months

[related id="1"] Compound, a popular non-custodial lending protocol that currently has $24 million worth of assets held as collateral, is set to roll out a new version of its protocol over the coming months, according to an announcement on Medium.

Known internally as Presidio, the second version of Compound will offer a "complete transformation" from its current iteration, opening borrow and lending access to theoretically any token standard on Ethereum by implementing new smart contracts and unique collateral requirements for every asset. In contrast, the current protocol holds all tokens in one smart contract and offers borrow pairs on only a select few more liquid pairs such as: BAT, DAI, REP, WETH, and ZRX.

In a conversation with The Block, Compound founder Robert Leshner said that by using a unique smart contract to hold every asset, the protocol would be easier to upgrade over time and could one day allow for token holders across projects to govern their own respective token interest rate models, borrowing parameters, etc.

"The first version of Compound uses a single smart contract that holds all the tokens, in Compound version 2 each asset has their own contract, similar to the Uniswap model. Because they're all linked together via the Compound protocol, how each of these assets interact with the protocol could be upgraded over time by upgrading individual smart contracts," Leshner said.

"One example of an upgrade could be assigning governance rights to certain pooled tokens. In order to fully decentralize Compound, which is our long-term goal, we have to let people be responsible for their own economics models. Being able upgrade unique smart contracts helps us on that path."

Leshner said Compound plans to roll out Presidio to testnets in the next couple of weeks — which will run in parallel with the legacy protocol — with the goal of deploying the new version to mainnet in the next 8-10 weeks, assuming nothing comes up with the smart contract audits.

Founded in mid- to late-2017, Compound was the brainchild of Leshner and Geoffrey Hayes, two former Postmates employees. Shunning the token sale route taken by most crypto projects, Compound announced an $8.2 million fundraise in May 2018. The round was backed by a host of investors including Bain Capital Ventures, Andreessen Horowitz and Polychain Capital.

The protocol saw over $43 million in originations in 2018, according to Bloqboard.