INSUBCONTINENT EXCLUSIVE:
metaphorically hidden under a mattress, failing to generate interest the way traditionally banked assets do
But Compound wants to create liquid money markets for cryptocurrency by algorithmically setting interest rates, and letting you gamble by
borrowing and then short-selling coins you think will sink
It plans to launch its first five for Ether, a stable coin, and a few others, by October.Today, Compound is announcing some ridiculously
powerful allies for that quest
rapid-fire investments over the past two months alongside this funding.]While right now Compound deals in cryptocurrency through the
Ethereum blockchain, co-founder and CEO Robert Leshner says that eventually he wants to carry tokenized versions of real-world assets like
the dollar, yen, euro or Google stock
If you borrow, you have to put up 100 percent of the value of your borrow in an asset Compound supports
If prices fluctuate and your borrow becomes worth more than your collateral, some of your collateral is liquidated through a repo agreement
And Compound takes a 10 percent cut of what lenders earn in interest
setting the interest rate] to the community
Compound could let people interact with crypto in a whole new way.The Compound creation storyCompound is actually the third company Leshner
and his co-founder and CTO Geoff Hayes have started together
One of their last companies, Britches, created an index of CPG inventory at local stores and eventually got acquired by Postmates
But before that Leshner got into the banking and wealth management business, becoming a certified public accountant
Partners will be crucial to solve the chicken-and-egg problem of getting its first lenders and borrowers
The round was just about to close when Coinbase announced Coinbase Ventures
So Leshner fired off an email asking if it wanted to join
I hope they survive for 100 years
Centralized exchanges like Bitfinex and Poloniex let people trade on margin and speculate more aggressively
That could make it a more critical piece of the blockchain finance stack
lending protocols on the Ethereum blockchain, like ETHLend and Dharma
But interest rates, no need for slow matching, flexibility for withdrawing money and dealing with a centralized party could attract users to
Compound.Still, the biggest looming threat for Compound is regulation
But to date, the SEC and regulators have focused on ICOs and how people fundraise, not on what people are building
either going to get annihilated and have to disgorge profits or dissolve
just one piece of the financial infrastructure puzzle that still needs to emerge around blockchain
Custodians, auditors, administrators and banks are still largely missing
When those get hammered out to make the space safer, the big money hedge funds and investment banks could join in
For Compound, getting the logistics right will require some serious legal ballet.Yet Leshner is happy to dream big despite all of the crypto
probably have [tens of thousands] of employees
