The Compound founder proposed four COMP distribution solutions

As Compound gets bigger and bigger, founder Robert Leshner is seeing two problems with Compound right now:

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1. Users concentrate extreme liquidation risks in BAT (and ZRX) market and put their assets and loan agreements at risk of liquidation.

2. Most users who are using the Compound agreement honestly have received little or no COMP. This goes against the goal of the COMP allocation mechanism to include core users in governance.

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Mr. Leshner offered four solutions:

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1. Reserve Factors

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Increasing the reserve coefficient for each asset makes it cheaper to supply and borrow the same asset. Mortgage assets with high slope curves (such as BAT, ZRX, REP) can be applied to a high, uniform reserve coefficient, such as 50-80%. This will increase the output cost of the assets while providing reserves to the agreement to compensate for the additional liquidation risk in the system.

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2. Updating Interest Rate Models

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Interest rate models for all assets could be more uniform, which would create a relatively level playing field for assets, although markets would still be affected by hot/yield rotation issues.

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3. Updating the Distribution Formula

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The cross-market allocation can be updated to: total borrowings * DOLLAR value

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Change the distribution mechanism to reward every dollar borrowed rather than every dollar paid in interest. Interest rates in each market should return to the natural borrowing demand/balance point (or a small multiple of them) and reduce the incentive to play the utilization game.

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4. Reduce COMP Speed

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Reduce COMP output speed by 0.50 COMP/ block. This will not necessarily change the distribution of COMP markets significantly (although it does have a non-zero impact), but it will give the community more time to respond.

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Text link:https://compound.comradery.io

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