Starting Tuesday, September 14, accredited banks and institutions can now borrow money from Compound Treasury and use digital assets like Bitcoin and Ether as collateral to meet rising liquidity needs.
Compound Labs is a decentralized lending platform and cash management solution for Compound protocol-backed platforms serving fintech, banking, and cryptocurrency clients and is the first and only decentralized finance (DeFi) firm to receive a credit rating from S&P Global Ratings.
The decision to borrow institutions money by Compound Labs, which was taken in light of the recent market volatility, was announced via its official Twitter platform.
According to the Compound Treasury, accredited banks and institutions can use Ether, Bitcoin, and other supported ERC-20 assets as collateral to borrow USD or USDC at fixed rates starting at 6% APR, and customers have the freedom to borrow the money and repay anytime as long as they are over-collateralized as it offers perpetual borrowing with no fixed repayment schedule.
Liquidity will be provided by clients of Compound Treasury and the Compound Protocol, which has more than $3 billion in assets and over $285 billion in total transaction activity since inception. Compound Treasury aims to increase customers’ confidence in the safety of their money by maintaining control over collateral.
Noting the robust demand for liquidity and the recent market volatility that has significantly reduced the amount of available liquidity and reliable options for borrowers, and institutions struggling to trust DeFi protocols to manage their balance sheets.
The vice president of Compound Treasury, Reid Cuming, is quite confident that their simple lending solution will meet the demand for liquidity; According to him;
Compound Treasury can now address demand for liquidity with a simple, reliable borrowing solution, while continuing to provide the same trusted service we’ve delivered to clients earning interest over the past year, and introducing borrowing expands our cash management product to meet more needs of our clients.