Compound Monthly Financial Report & Analysis - March 2023
This Newsletter issue covers Compound DAO & Protocol Performance during March 2023
Table of contents
Governance Recap
Crypto Markets & COMP Analysis
Supply & Borrowing Analysis
Revenues Analysis
Governance & Markets Recap
March 2023 was a relatively busy month with six governance proposals. They were:
The CGP Hackathon Sponsorships in 2023 was executed on March 4, 2023
Compound V2 -> V3 Migration Phase 1 was executed on March 6, 2023
Initialize cUSDCv3 on Polygon proposal was executed on March 7, 2023
Risk Parameter Updates for V2 and V3 WETH Comet was executed on March 14, 2023
Resume cUSDC minting was executed on March 16, 2023
Certora <> Compound Formal Verification failed as it was canceled on March 27, 2023
Crypto Markets & Comp Analysis
March 2023 was a turbulent month for crypto.
Silicon Valley Bank, Signature Bank, and Silvergate Bank, all crypto-friendly banks, crashed, setting off fears of a liquidity crisis in crypto.
Circle confirmed $3.3 billion, approximately 8% of their reserves, were at risk due to SVB’s collapse, causing USDC to briefly depeg.
The price of BTC dropped during this period but rallied to end the month at $28,480 and record a 22.8% MoM price increase.
ETH also suffered from a dip during the same period but still ended the month at $1,824. This was a 13.15% MoM price increase.
COMP, however, suffered an 11.86% MoM price decrease, ending the month at $43.1
Supply & Borrowing Analysis
Data Source : DefiLlama
Monthly Supply, borrowing, and Available Supply are defined as the average daily data (sourced from Defi Llama) for the month.
Compound v2’s total liquidity (both available supply and borrowed supply) fell by 9.74%. Compound v3-USDC, on the other hand, had a slight gain of 1.03% of its average monthly supply.
USDC borrowing on Compound v3 also fell by 11.95% during the Month of March, as it was affected by the financial turbulence.
Data Source: DefiLlama
After months of mostly falling, Compound V2 Supply was beginning to improve, when the banking crisis meant there was a small reversal of the trend.
Data Source: DefiLlama
Since launching in August USDC Supply on Compound v3 has been steadily growing. The growth did slow down to just above 1% in March 2023.
Data Source: DefiLlama
Over the past half year, borrowing on Compound V2 has been dropping. Despite a slight uptick in February 2023, the downward trend continued in March.
Data Source: DefiLlama
Borrowing on USDC on Compound v3 has been growing rapidly, on the other hand. It was still affected by the month’s bear run, slowing down to only a 1.01% MoM growth.
Revenues Analysis
Data Source: DefiLlama, Flipside Crypto
v2 Suppliers generated 1.66 M USD in March 2023. This was a fall of 1.78% compared to the previous month.
v2 borrowing generated 201k USD for the protocol reserves during the month of March.