Decentralized finance protocol Compound is making significant strides in the industry by launching new lending vaults on Polygon, in collaboration with Morpho. The new vaults officially went live on March 13, marking a pivotal moment in Compound’s evolution.
The decision to integrate Morpho’s technology into Compound’s platform comes after a governance proposal that aimed to bring Morpho-powered vaults to Polygon. The collaboration between Gauntlet, Compound, and Polygon includes $3 million in incentives, with $1.5 million contributed by each party. This move has sparked excitement among COMP holders and the wider DeFi community, as it signifies a shift towards adopting Morpho’s infrastructure.
Paul Frambot, co-founder and CEO of Morpho, described the collaboration as a “full-circle moment” for the two platforms. Morpho, which initially started as an optimizer on top of Compound, has now evolved into a fully independent lending primitive. Compound’s decision to build on Morpho showcases the growth and maturation of both projects.
The partnership with Morpho on Polygon was initiated through a proposal by Gauntlet in January. The aim was to enhance risk controls, accelerate asset listings, and provide a sustainable path forward for Compound. As Aave and Morpho continue to expand their market share, Compound sees the integration of Morpho as a strategic move to benefit COMP holders.
By leveraging Morpho’s lending infrastructure, Gauntlet’s risk management framework, and Polygon’s low fees and deep liquidity, Compound is poised to reshape the on-chain lending landscape. Morpho, with a total value locked of over $3 billion, has secured funding from top investors like Coinbase Ventures and a16z. In comparison, Aave boasts a TVL of over $17 billion, while Compound’s TVL stands at $2.3 billion according to DeFiLlama.
The launch of new lending vaults on Polygon represents a significant milestone for Compound and sets the stage for further innovation and growth in the DeFi space. With the support of key partners and a strong community behind them, Compound is well-positioned to continue pushing the boundaries of decentralized finance.