How Compound V3 Allocates COMP Rewards Compound issues rewards in COMP tokens to lenders and borrowers in proportion to their share of the a market’s lending and borrowing. The algorithm is extremely similar to the MasterChef Staking Algorithm, so the reader should familiarize themselves with that first. High level overview of Compound V3 rewards Similar […]
Bulkers in Compound V3 The bulker contracts in Compound V3 are multicall-like contracts for batching several transactions. For example, if we wanted to supply Ether, LINK, and wBTC as collateral and borrow USDC against it in one transaction, we can do that. We can also reduce the collateral holdings and withdraw a loan in one […]
Understanding Collateral, Liquidations, and Reserves in Compound V3 In this chapter we will examine the following topics about Compound V3: collateral valuation absorbing insufficiently collateralized loans (liquidations) selling absorbed collateral what reserves are and how reserves affect liquidations. These are a lot of topics to go over in one article, but they are all heavily […]
cUSDC V3 (Compound V3) as a non-standard Rebasing Token, CometExt.sol The Compound V3 contract behaves like a rebasing ERC 20 token. A rebasing token is a token which has an algorithmically adjusted supply rather than a fixed one. The “token” here represents the present value of positive USDC balances. That is, lenders can transfer the […]
DeFi Interest Rate Indexes: Principal value and Present Value in Compound V3 The intuitive way to track lender deposits is to record the amount of USDC they deposited and the time they deposited. Compound V3 does not do this. Instead, similar to SushiSwap Masterchef Staking Algorithm, Compound V3 tracks the hypothetical gain of one dollar […]
Compound V3 Interest Per Second The Compound V3 protocol measures interest on the scale of seconds. The Compound V3 frontend scales the number up to years for human friendliness. When we check the interest rate parameters for Compound V3 on Etherscan, we see the following parameters for borrowers. In the following section, we will corroborate these parameters […]
The Architecture of the Compound V3 Smart Contract Introduction and prerequisites Compound is one of the most significant lending protocols in DeFi, having inspired the design of nearly every lending protocol on several blockchains. This article explains the smart contract architecture of V3. Since Compound is a lending protocol, we assume the reader is familiar […]