1/🧵 Compound Bends the Knee?
Since launch, Compound’s Morpho vaults have earned just $31 despite $1.5mm in COMP incentives. Is it a strategic adaptation or a risky gamble for Compound?

Let’s break it down ⬇️

Earn, Borrow, Build on Morpho 
/morpho and app.morpho.org

In Data We Trust

https://dune.com/seoul/

2/ Overview
Compound, once a DeFi lending powerhouse, has faced increasing competition from Aave, @morpho, @euler. To stay relevant, it’s partnering with Gauntlet and Morpho to launch vaults on Polygon with $1.5mm in $COMP incentives matched by $1.5mm in $POL

3/ The Pitch: A Win-Win?
On the surface, this move appears to benefit Compound:
✅ A new revenue stream
✅ Leverages Aave's deprioritization of Polygon
✅ Could lead to further partnerships

Economic modeling for crypto. Research, optimization, and risk management for DEX, Lending, Perpetuals, (Re)staking, Stablecoins, and Ecosystems.


gauntlet.xyz

4/ The Reality: Who Benefits?
When taking a closer look, concerns emerge:
🔹@gauntlet allocates Compound’s capital
🔹Morpho benefits from Compound’s liquidity
🔹Polygon gets a TVL boost

Meanwhile, Compound fronts $1.5mm with uncertain returns.

5/ Red Flags: Conflicts of Interest
🚨 Gauntlet cast 27.6% of votes on its own proposal
🚨 Major delegates voted with no public commentary
🚨 Early votes from previously inactive delegators

7/ Final Thoughts
With this partnership, Compound may be ceding control of its ecosystem and capital.

The real winners? Morpho, Gauntlet, and Polygon at Compound's expense. However, with limited interest in the vaults, the true impact remains unclear. Only time will tell.

8/ Dune Dashboard & Article
📊Dashboard: https://dune.com/seoul/cmp
📝Article: Compound Bends the Knee: Shifting Towards Morpho & Polygon for Survival (https://seoulcalibur.substack.com/p/compound-bends-the-knee-shifting)

6/ Future Fee-Split?
For now, Compound keeps 100% of vault revenue. However, the proposal hints at a future fee-split meaning Gauntlet could claim a share later.

With Gauntlet and Morpho's influence, another vote could introduce a fee switch with little resistance.