Compound Chain has just been launched today but the community was not happy about it as the platform received plenty of backlashes so let’s find out why in today’s crypto news.
The decentralized credit lending and borrowing platform launched Compound Chain that allows users to lend and borrow crypto. COMP is the native token that will allow the users to govern the protocol. Users are able to lock up a variety of the assets on the platform and to earn interest or borrow funds to use on other protocols to start trading. Now, with the launch of the Compound Chain, the use case grows further to that of enabling money market services on multiple blockchains.
Earlier this year, $COMP governance replaced centralized control of the Compound protocol.
The community has bloomed; 32 upgrade proposals, new features, new markets, massive growth.
While you've built, we've been researching ways to expand & improve decentralized finance.
— Compound Labs (@compoundfinance) December 17, 2020
Compound launched the Compound chain a day ago but the blockchain was released months after the proposal moved from being the centralized player to a fully community-governed protocol. The proposal said that the current version of the platform on Ethereum faced three main limiting elements like the inability to serve assets on other chains, risks of hosting the supported asset, and gas costs. The interesting use case is that of supporting assets that are centralized or state-backed. This means that the Compound platform can support, stake or transfer digital currencies that belong to central banks according to the paper:
“[Compound is] proactively preparing for the rapid adoption & growth of digital assets on a variety of new blockchains, including Eth2 and central bank digital currency ledgers.”
Hmm. I'm not a fan of yet another chain for a thing like this.
— Mark Jeffrey ⚡️🚀 (@markjeffrey) December 17, 2020
The new blockchain introduced CASH as well as a new cryptocurrency. The token can be used to pay for transactions on the COMP network while the coin can be used to govern the protocol. While the Compound Chain presented a new paradigm for the advancement of both the blockchain and the cryptosystem, some in the crypto circles are not happy with the way the protocol progressed. Eric Wall, the CIO of Arcane Investments thinks that the idea of isolated appcoins like this one can achieve decentralization which is worse than honest centralization.
If you have a server processing requests, and you "blockchainify" this by asking a few entities to sign off on your state transitions so you can say you're a "dapp" while you still do all the dev & push all the upgrades, I can assure you, your decentralization level is still 0.
— Eric Wall 🟩🟩 (@ercwl) December 18, 2020
Wall continued that acting as a truly decentralized project while handling development and pushing the upgrades without community interference put Compound’s decentralization plans to the minimum and many confirmed his sentiment.
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