[cUSDC] MIP6 Collateral Onboarding Application

cUSDC MAKER IMPROVEMENT PROPOSAL (MIP6 Collateral Onboarding)

1. Who is the interested party for this collateral application?

Maker Community Member @ElProgreso on behalf of the Maker Community

2. Provide a brief high-level overview of the project, with a focus on the applying collateral token.

Each asset supported by the Compound Protocol is integrated through a cToken contract, which is an EIP-20 compliant representation of balances supplied to the protocol. By depositing USDC and minting cUSDC, users (1) earn interest through the cToken’s exchange rate, which increases in value relative to the underlying asset, and (2) gain the ability to use cUSDC as collateral.

cTokens are the primary means of interacting with the Compound Protocol; when a user mints, redeems, borrows, repays a borrow, liquidates a borrow, or transfers cTokens, she will do so using the cToken contract.

There are currently two types of cTokens: CErc20 and CEther. Though both types expose the EIP-20 interface, CErc20 wraps an underlying ERC-20 asset, while CEther simply wraps Ether itself. As such, the core functions which involve transferring an asset into the protocol have slightly different interfaces depending on the type, each of which is shown below.

For more information please visit compound.finance/docs/ctokens

3. Provide a brief history of the project.

In February 2019, the Compound paper was released. Compound is a protocol on the Ethereum blockchain that establishes money markets, which are pools of assets with algorithmically derived interest rates, based on the supply and demand for the asset. Suppliers (and borrowers) of an asset interact directly with the protocol, earning (and paying) a floating interest rate, without having to negotiate terms such as maturity, interest rate, or collateral with a peer or counterparty.

4. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated

https://etherscan.io/token/0x39aa39c021dfbae8fac545936693ac917d5e7563

5. Link any available audits of the project. Both procedural and smart contract focused audits.

https://github.com/trailofbits/publications/blob/master/reviews/compound-governance.pdf

6. Link to any active communities relating to your project.

7. How is the applying collateral type currently used?

cUSDC accumulates interest through their exchange rate — over time, each cUSDC Token becomes convertible into an increasing amount of it’s underlying asset, even while the number of cUSDC Tokens in your wallet stays the same.

Let’s say you supply 1,000 USDC to the Compound protocol, when the exchange rate is 0.020070; you would receive 49,825.61 cUSDC (1,000/0.020070).

A few months later, you decide it is time to withdraw your USDC from the protocol; the exchange rate is now 0.021591:

Your 49,825.61 cUSDC is now equal to 1,075.78 USDC (49,825.61 * 0.021591)

You could withdraw 1,075.78 USDC, which would redeem all 49,825.61 cUSDC

Or you could withdraw a portion, such as your original 1,000 USDC, which would redeem 46,315.59 cUSDC (keeping 3,510.01 cUSDC in your wallet)

8. Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

No organization bears responsibility for the collateral and users bear the responsibility of their collateral and use of the protocol

9. Where does exchange for the asset occur?

On decentralized exchanges

10. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.

N/A

11. (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.

N/A

12. (Optional) List any possible oracle data sources for the proposed Collateral type.

Compound uses Open Price Feed—please visit:

5 Likes