The new feature will reward participants who support Compound's liquidators.
Shutterstock photo by jamakosy
Undercollateralized loans are an issue on Compound.
In response, Compound has introduced a new platform called B.Protocol in order to solve the problem.
B.Protocol rewards users who support Compound's loan liquidators.
Share this article
Compound Finance’s long-awaited liquidity backstop, B.Protocol, has gone live, as announced in a Medium blog post.
Compound Finance allows users to borrow and lend cryptocurrency. The project’s total locked value has soared above $5 billion, making it the second largest DeFi platform by that measure.
Though users must typically overcollateralize their loan by putting in more than they borrow, undercollateralized loans are commonplace as well. B.Protocol aims to prevent this by giving liquidity providers the ability to liquidate such loans from the outset.
This process “recycles” bad loans. If a borrower cannot pay their loan back, the loan is liquidated, returning funds to Compound’s contracts. This allows other borrowers and lenders in the community to receive greater yield on top of their usual interest rate.
How to Use B.Protocol
Conpound users who manage their accounts through B.Protocol will receive points toward a user score. Liquidation proceeds will be distributed to those users at the end of April. B.Protocol has approximately $30 million of funds in reserve; voting on the distribution of those funds will occur in the future.
Users will also gain the ability to vote on matters such as proceed distribution and development decisions. Users with a higher score will gain a relatively larger vote.
According to the Compound community, B.Protocol will benefit all participants, including users and liquidators, and will strengthen the Compound platform as a whole.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
Compound Finance has announced a whitepaper for a new blockchain and token called Compound Chain and CASH, respectively. Compound’s New Blockchain and Token According to a recently published whitepaper, the...
DeFi Users Can Now Earn Compound Interest on Crypto.com