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