Each time a user interacts with a cToken, the Comptroller is asked to approve or deny the transaction. The market has not been entered by the account. COMP was the spark that created enormous interest in “liquidity mining” (often referred to “yield farming“) after the value of its COMP token increased from zero to $650 million within 24 hours. Borrowings are paid back with interest. This is due to the inherent volatility of an asset. To prevent liquidation, Compound also offers an Account Service API to monitor at-risk addresses. In the accompanying forum post, Getty explains that the growing liquidity for WBTC on DEXes and higher collateral factor for WBTC on other DeFi protocols warrant this parameter update. Compound leverages audited smart contracts which are responsible for the storage, management and facilitation of all funds. For example, Basic Attention Token (BAT), which has a Collateral Factor of 50% would generate less borrowing power than the stablecoin Dai, which has a higher Collateral Factor (reflecting its lower risk) of 75%. This website is intended to provide a clear summary of Ethereum's current and historical price as well as important Prices are updated every minute in real-time and the open/close prices are recorded at midnight UTC. Exited markets will not count towards account liquidity calculations. Users would supply (lend) USDC as collateral and borrow USDT against it (capturing COMP rewards on both sides of the market). For instance, major upgrades, such as changing the risk system, may have a 14 day delay. See the Comptroller Storage contract for the Market struct definition. A user’s Borrowing Power is directly correlated to the amount of collateral provided on the supply side. Borrowing an asset reduces Account Liquidity for each USD borrowed; withdrawing an asset reduces Account Liquidity by the asset’s collateral factor times each USD withdrawn. While social factors like these don’t account for systemic risk or black swan events, they imply a certain degree of trust from other major players in the industry. Debt begins accruing at the predefined interest rate and can be repaid at any time by pressing “repay” button. The Collateral Factor for each asset is determined by Compound Finance’s governance mechanism. Generally, large or liquid assets have high collateral factors, while small or illiquid assets have low collateral factors. risk weights (called Collateral Factors) to make its determinations. Compound has been audited by a number of reputable security agencies including OpenZeppelin and has been rated on the Consensys-backed platform, DeFi Score. The Comptroller maps user balances to prices (via the Price Oracle) to The Comptroller is the risk management layer of the Compound protocol; it determines how much collateral a user is required to maintain, and whether (and by how much) a user can be liquidated. The amount of cTokens is fixed at issuance, with the amount of underlying assets representing one cToken gradually increasing relative to the Supply APR. At this stage, Compound – the company – is in control of that platform’s risk parameters (albeit with a time-delay). Each address in the getAllMarkets array can be used to fetch a metadata struct in the Comptroller’s markets constant. Further, you can borrow digital assets from that liquidity pool by posting collateral. Alternatively, COMP can be automatically claimed whenever you … Assuming that the user has already completed the previous steps to generate “Borrowing Power”, it is now possible to borrow assets using Compound’s borrowing dashboard. In a handful of situations where potential flaws were discovered, the Compound team were very transparent in addressing concerns, ultimately showing the community what went wrong, how it was fixed and how similar issues will be mitigated in the future. Because the Compound Protocol exclusively uses unsigned integers, Account Liquidity returns either a surplus or shortfall. For example, if the liquidation incentive is 1.1, liquidators receive an extra 10% of the borrowers collateral for every unit they close. Proposals are currently posted by Compound and given a window of time for the community to reflect and comment on any major issues prior to integrating those changes into the protocol. The distribution of COMP was done in a way that aimed to maximize the number of unique holders as well as reward those who provided liquidity to the platform. The account does not have sufficient liquidity to perform this action. If an asset has a 0% collateral factor, it can't be used as collateral (or seized in liquidation), though it can still be borrowed. The market is not currently listed by the comptroller. The comptroller rejects the action requested by the market. Decentralized Finance, better known as DeFi, is predicated on the tenants of non-custodial, trustless and secure systems with 100% uptime. The stablecoin, Dai, is at the heart of Ethereum's decentralized finance ecosystem. Exit a market - it is not an error to exit a market which is not currently entered. Each cToken has a unique ERC20 address which can be viewed on Ethereum blockchain explorers like Etherscan.io. Note that not every market has COMP distributed to its participants (see Market Metadata). The Timelock is administered by a designated address. It maps cToken addresses to an integer of each market’s COMP distribution per Ethereum block. It is one of the most widely used decentralized finance systems in the ecosystem and helps demonstrate the power of … Governance. Currently, the Compound team controls the Timelock administrator address.”. Get the list of markets an account is currently entered into. “Each proposed governance action will be published with an ETA at least 2 days in the future from the time of announcement. In optimal cases, users went further by swapping borrowed USDT to USDC and then leveraging again. Compound defines a Collateral Factor per market. The COMP token is an extraordinary case study of how a DeFi protocol can bootstrap liquidity. Using a Collateral Factor of 0.75 reduces the upper bound to $24.27M. The Compound DApp allows you to earn interest by supplying assets to a shared liquidity pool from anywhere in the world. On the flip side, borrowers can take a secured loan from any Compound pool by depositing collateral. WBTC Goes Live on Compound with 40% Collateral. How much of $15.34M may be liquidated? ACCEPT_PENDING_IMPLEMENTATION_ADDRESS_CHECK. The sender is not authorized to perform this action. In order to borrow, users must “Enable Borrowing” by submitting one more transaction. Collateral factor determines how much can be borrowed based on the quality of the collateral. The amount of tokens a user can borrow depends upon the collateral factor. The Comptroller contract has a mapping called compSpeeds. Collateral factors for each asset can be fetched using the Comptroller contract.
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