Compound Launches Treasury to Introduce Institutions to Defi
June 30, 2021
Compound, one of the leading defi-based protocols, is launching a new service called Treasury. Compound’s Treasury is a new product designed to help institutions enter the defi space. Launched in partnership with Circle and Fireblocks, it skips the uber astounding rates conventional defi protocols offer. However, it seeks to offer stable revenue for companies looking to get passive income from their funds in dollars.
Compound to Coax Institutions With Treasury
Compound Labs, the company behind the Compound defi protocol, launched Treasury, a new defi service designed for institutions. This new service seeks to offer institutions the chance to garner defi-based gains without having to go the extra mile to do so. Treasury allows third parties to use fiat dollars to enter the space.
Compound Labs has partnered with Circle and Fireblocks and allows institutions to register and open a treasury account, where these institutions can wire dollars. Circle offers the conversion services to transform these dollars to USDC while using Fireblocks to keep these assets safe from attacks.
Treasury will offer a fixed interest rate of 4% per year on the funds deposited. This is very different from other defi “degen” protocols that offer risky yields of 1000%, but it offers higher yields than traditional banking institutions. The product will also allow withdrawals on demand, effective 24 hours after the request, and no fixed terms.
Getting Institutions Into Defi
While some companies have been making advances in bringing defi to institutions, there has not yet been a real success story in this regard. Metamask also announced a service directed at institutions not long ago, offering support to access apps and protocols. But due to the number of hacks in the environment, these third parties are wary of supporting the protocols.
Compound Labs is looking to remedy this wariness by partnering with known and regulated companies. Circle and Fireblocks are involved, possibly giving the instrument an advantage over similar offerings. Current, a fintech company, has already partnered with Compound to offer Treasury through its app. Trevor Marshall, Current’s Chief Technology Officer stated:
Working with Compound Treasury, we’ll be able to give our members access to the protocol’s interest rates through a simple and unified experience that can enable even more people to improve their financial outcomes.
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