Proposal to add cUSDC (V3)
Proposal to add cUSDC (V3) as a capped collateral to Interest Protocol.
The latest iteration of Compound’s lending market, like previous versions, provides a tokenized representation of USDC that has been deposited into the Compound Protocol. It accrues interest at a rate set algorithmically by the interest rate curve for deposited and borrowed USDC. At time of writing, that is 2.14%. cUSDC is freely transferrable and redeemable. The token contract is upgradeable by Compound governance.
Because cUSDC (V3) is interest-bearing USDC redeemable with Compound, which is not the issuer of USDC, there is a risk of the token becoming illiquid should Compound have insufficient USDC reserves to meet withdrawals. To mitigate this, Compound, similar to Interest Protocol, automatically increases rates rapidly to encourage new USDC to enter the protocol or for borrowed USDC to be returned. There is no obvious mechanism to introduce slippage risk when redeeming.
The stable value of cUSDC in relation to USDC, the sole reserve asset of Interest Protocol at time of writing, makes it a secure asset that is also yield bearing. In times that Interest Protocol charges users less than cUSDC yields, it allows for users to safely arbitrage the rates, resulting in higher cUSDC and USDi usage.
Token Address: 0xc3d688B66703497DAA19211EEdff47f25384cdc3
Capped Token address:
Liquidation incentive: 0.75%
Maximum Cap: 1,000,000
Price deviation: N/A
Market Cap: $195,000,000
Liquidity: Equivalent to USDC reserves at Compound V3; ~66 million at time of writing
Coingecko 7-day avg 24hr volume: N/A
Notable exchanges: N/A
- Type of contract: staked asset token
- Underlying asset: USDC
- Time: Deployed August 13, 2022
- Privileges: A 4 of 6 Guardian msig can pause V3
- Upgradability: Yes
Compound III Documentation
Compound Finance Marketplaces
Audit by Open Zeppelin
Audit by Chain Security