Compound Pivots to Institutions With $52M as DeFi Demand Cools

Compound Finance approved a $52 million budget and overhauled its leadership as the DeFi lender looks to attract more institutional investors.

The move comes as assets locked on Compound have fallen to about $1.2 billion from a peak of $12 billion in September 2021. The protocol plans to focus on real-world assets, partnerships and credit infrastructure for traditional financial institutions.

Compound Turns Toward Institutions

Compound helped pioneer DeFi lending after launching in 2018. It has since processed about $480 billion in deposits and borrowing, but has lost ground to larger rivals. Aave now holds about $14.9 billion in assets, more than 11 times Compound’s total, according to DeFiLlama.

The shift comes as the broader DeFi market faces weaker demand, lower yields and security exploits. Sector-wide total value locked has fallen by more than a third this year to about $70 billion.

Leadership Overhaul Backs New Strategy

Compound’s new leadership includes Christopher Donovan, Steven Liu and Aaron Schnarch, the former CEO of Coinbase Custody. Executives from Anchorage Digital, HSBC, Broadridge Financial and Maple Finance have also joined the team.

Schnarch said institutional adoption has been limited by gaps between DeFi products and traditional finance standards. Compound plans to address those gaps through stronger compliance and technical infrastructure.

According to CoinMarketCap data, COMP rose 11% over the 24 hours to $17.97 as of Aug. 18.