Compound Labs has announced the first smart contract deployments for Compound III, which will create a USDC market on Ethereum.
The contracts await activation by Compound governance but are now open to review by the community.
According to the latest update from Compound’s protocol development log, the deployment brings Compound III “just a governance proposal away from being live.”
One of the smart contracts involved is a ‘configurator’, which will allow Compound to set and update the parameters of a Comet proxy contract. Comet is another name for Compound III – the DeFi lending protocol’s new multi-chain strategy for deploying on all EVM compatible networks.
“This pattern allows significant gas savings for users of the protocol by ‘constantizing’ the parameters of the protocol,” explained Kevin Cheng – Senior Software Engineer at Compound Labs – in the update.
Cheng provided the parameters of the upcoming protocol, which will allow users to supply WETH, WBTC, LINK, UNI, and COMP as collateral for borrowing USDC. Each comes with custom borrowing and liquidation rates, with WETH and WBTC featuring slightly lower liquidation fees.
The USDC market will target a reserve pool of 5 million USDC, and feature a minimum borrowing size of 100 USDC.
USDC’s role in DeFi has come into question ever since its issuer – Circle – froze the stablecoins inside Tornado Cash wallets in response OFAC demands. MakerDAO has even considered dumping its $3.5 billion USDC reserves for ETH to back its decentralized stablecoin, DAI.
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