Compound Opens Institutional-Only Lending Market

Compound Foundation has opened an institutional lending market that restricts borrowing to a whitelisted set of institutions and uses ETH, wstETH, WBTC and cbBTC as collateral. The market runs on Compound v3 and offers higher loan-to-value settings than typical retail markets, with ETH allowed up to 87% LTV, wstETH up to 85%, and both WBTC and cbBTC up to 81%. Compound said the market was oversubscribed on day one and named DeFi Saver, K3/Nexo, KPK and Yearn among initial participants.

The institutional market segregates liquidity so approved borrowers operate under a distinct collateral set, bespoke LTVs and a named point of contact, a departure from the previous model where funds and retail wallets faced identical parameters. Compound framed the launch as the first deliverable from the Foundation’s recently relaunched program focused on institutional credit and client service.

Participation begins at 100,000 USDC in deposits. To encourage early supply, Compound has allocated 200,000 USDC in supplier incentives distributed pro rata to whitelisted participants over three months, within a $20 million supply cap. Each eligible asset carries a $10 million borrow cap. The Foundation has not published liquidation thresholds, reserve factors or the detailed whitelisting criteria in the public release and directs institutions to a request-access form.

The market launch comes three weeks after the Foundation’s relaunch on Aug. 17 with a $52 million budget and several hires from firms including Coinbase, Anchorage, NEAR and Maple. The Foundation holds $14 million in its multisig while $38 million remains in reserve pending milestone-based approvals by the DAO. Compound reports $1.53 billion in total value locked with $638 million borrowed (sixth among lending protocols on DeFiLlama), and says Ethereum accounts for $1.42 billion of that TVL. Compound also noted that v3 has operated for four years without an exploit. COMP trades at $20.88, up 9% over seven days, giving a market capitalization of $212 million.