The views and opinions expressed in this AMA are those of the guest and do not necessarily reflect the official policy or position of Binance.US.
The Binance.US Angels hosted an AMA with Compound Labs strategy lead Calvin Liu on Telegram. You can read the full transcript below:
Can you tell me a bit about yourself and why did you get into blockchain?
I’m the Strategy Lead at Compound Labs, and lead all business initiatives for the company over the past several years. Prior to Compound, I was an active investor (and still am) in crypto tokens and projects since 2013, when I first discovered Bitcoin. I was very fortunate at the time to work for a consulting firm that had as clients many small crypto exchanges, some of whom are now very large crypto exchanges. Besides crypto I’ve worked in data analytics, management consulting, and investment banking. I’m based in San Francisco.
Can you give us a little history about Compound and then, what problem does Compound solve in the blockchain industry?
Compound Labs, the creator of the protocol, was founded in 2017.
The first version of the Compound protocol was launched in September 2018, and the second, improved version was launched in May 2019.
The COMP governance token and the governance system around it were launched in June 2020, at which point ownership and administration of the protocol was handed over from the Compound Labs team to the community at large.
I'm very impressed with much Compound has accomplished in three years.
I was closely following the launch of COMP in June and the success far exceeded all my expectations. Major congratulations to you and the entire team!
Could you please tell me more about what role COMP plays within the network?
The reception to COMP surprised us as well 🙂
We couldn't have predicted it, and then the explosion of DeFi experimentation that's come in the two months since.
COMP is a governance token that is freely distributed to users of the Compound protocol. It enables users of the protocol to direct future development and upgrades of the protocol in the way they feel best serves theirs and the community’s interests.
If you hold COMP, you can participate in governance by visiting /governance on our website, or checking out the governance forum at comp.xyz. Suggest proposals, vote on proposals! Compound (and COMP) can evolve however you want it to.
Btw, i failed to answer the second part of your question above, about what problem Compound is solving! I'd like to clarify that.
The Compound protocol is a financial primitive for interest rate markets. It’s decentralized technological infrastructure that can support interest rates for every crypto asset on Ethereum. In the future there's a chance every crypto asset flows through the protocol, and never sits idle in wallets. Every asset can and should earn interest!
Thank you for clarifying. I really like how the Compound protocol allows users to earn interest on their crypto assets while still maintaining full custody of their assets.
This is one of the big reasons that drew me to Compound, and when COMP was announced, I was even more delighted to have the opportunity to participate in governance.
I think it's safe to say that COMP started the DeFi bull run!
Could you tell our community what are the advantages of holding COMP over the long and short term?
We often hear that COMP started the DeFi bull run, but I think it was just the match that lit a huge mountain of tinder.
A lot of founders and technologists have been building for years during a pretty rough crypto bear market, and now all their work is being recognized. There have been huge fundamental improvements in the space. Really exciting
As for the advantage of holding COMP - as a governance token, COMP is a really unique and powerful opportunity for crypto holders and DeFi users to not just speculate on asset prices, but to actually use a token to own and direct the future of a leading DeFi network and protocol!
I couldn't agree more, it was a tough crypto winter but the builders and blockchain enthusiasts never left. We just kept building 😁 and now crypto is ready for prime time!
I really admire Compound Labs for this creative decision making that allows the COMP community to govern the future of the protocol.
Rest assured that myself and the entire COMP community will do our best to make the Compound protocol the best it can be!
Could you share what Compound Labs is working towards now that COMP is being distributed to the community?
We’re staying busy, I’ll tell you that! We can’t say much right now on the details, but we’re working on projects that we hope will be earth-shattering when they launch. I’m sure you’ll hear about them as we make progress :)
Where do you envision both COMP and the Compound protocol will be in 1-2 years?
Thanks, before crypto it really wasn't possible to do decentralized governance in this way. I think this is a new type of organizing management that could really change the world, in the very long term.
As for Compound Labs, we’re staying busy, I’ll tell you that! We can’t say much right now on the details, but we’re working on projects that we hope will be earth-shattering when they launch.
I’m sure you’ll hear about them as we make progress 🙂
But that's all I can say for now 😉
I can imagine the team is very busy 👍🏻. I'm sure I can speak for everyone that we all eagerly await to hear upcoming news on what's next for Compound.
I have full faith that the team will continue to amaze not just DeFi, but the entire crypto community!
Well, this brings us to our last question. Where do you envision both COMP and the Compound protocol will be in 1-2 years?
At this point, Compound Labs is no longer the steward of the protocol. The direction of the protocol and for COMP is truly up to the community of tokenholders - so whatever they envision, is what will happen.
What I PERSONALLY hope happens, as a governor/tokenholder myself:
(1) The protocol remains completely safe
(2) Adds many new markets
(3) Continues to upgrade and complexify its economic design (with more sophisticated liquidation mechanisms and more sophisticated interest rate models)
(4) Continues to be integrated into other applications, projects, and businesses as a default service for earning interest on idle assets.
People have lost funds to scams and hacks in the cryptospace. How safe and secure are someones funds who is invested in compound compared to other defi projects?
Some people say defi will just come and go, just like ICO's and IEO's did. How long do you see defi lasting?
Is the COMP token pre-mined or can it be mined, staked or support a masternode?
It's a good question - the scams and hacks that have happened across crypto are a bad mark for the whole industry.
However, Compound has been live for 2 years, currrently has $2 billion of assets in the protocol, and has never had a security incident.
I'm confident in saying that Compound has had more security audits, and economics audits, then any other DeFi project in the space. The protocol has had 10+ audits, has a $150,000 bug bounty, and has had $13 billion flow through it cumulatively, without ever losing $1 through any scam or hack.
Is there any way to deal with users borrowing against themselves to get free tokens?
There are certainly ways to solve the problem, but the community of tokenholders is going to have to figure it out for themselves. Doesn't seem like it requires an urgent fix, but in the long run it does seem unhealthy for the long-term utility of Compound.
What was the first crypto you owned and do you still own some today?
First crypto was BTC and I definitely still own some 🙂 although I own a lot of other assets now too! I personally hold about 10-12 different cryptocurrencies.
Where do you see DeFi playing out with traditional institutions? Would JPM or GS participate? And not simply by speculating.
The bet is that they eventually will. Not sure if it will take 2 years or 20 years (most likely something in between) but these types of firms already have a lot of interest in DeFi. We've done presentations to Visa, JP Morgan, and many other large institutions. They are very much paying attention and looking for the right way to eventually get involved.