The decentralized finance (DeFi) lending platform Compound has announced a treasury product for businesses and institutions. It will allow large clients to earn a fixed yield of 4% per year - far more attractive than yields in the traditional financial world.
The DeFi lending pioneer made the announcement in a blog post on June 29, adding that the new Compound Treasury has been designed for non-crypto native businesses and financial institutions to access the benefits of the protocol.
Compound stated that the protocol has performed flawlessly throughout the market volatility and has secured itself as a pillar of the DeFi ecosystem. It wants to bring this security and reliability to institutional investors by expanding its suite of products.
Institutional lending pool
Compound Finance will be working with crypto custody firm Fireblocks and Circle (the company behind the USDC stablecoin). They added that the new product will enable Neobanks, fintech startups, and other large holders of dollars to access the interest rates available in the USDC market on the protocol.
It aims to remove the complexities associated with DeFi such as crypto wallet management and private key storage to simplify the entire process. Clients will need to simply transfer USD into their Compound Treasury account and instantly gain access to interest rates of 4% per annum. This is “orders of magnitude” higher than any high street bank can offer on dollar savings accounts, the DeFi project added.
Expansion of the DeFi markets
Funds and withdrawals can be made at any time with a 24-hour turnaround, and there are low minimums, no maximums, and no fixed terms or durations. It added that the product launch follows many months of customer and regulatory compliance research.
“Our vision is that Compound Treasury becomes the bridge for non-crypto financial institutions to deliver the core benefits of DeFi to the next billion users, and we are extremely excited to work with our customers to navigate this enormous opportunity.” - Compound Finance announcement
Compound has begun onboarding customers, and plans to expand access to treasury accounts significantly over the coming months. In March, the team announced a prototype called “Gateway” which has been built on the Substrate platform to provide cross-chain interest rates and collateral markets.