Compound Finance Approves Record $52M Budget in Institutional Pivot

Compound Finance, one of the earliest decentralized lending protocols on Ethereum, has overhauled its senior management and approved a record $52 million budget as part of an aggressive push to attract institutional investors. The move comes as the protocol’s total value locked has dropped to roughly $1.2 billion, down about 90% from its September 2021 peak of $12 billion, according to data from CoinDesk and DeFiLlama.

The leadership team now includes Christopher Donovan, former chief operating officer at the Near Foundation; Steven Liu, previously with Maple Finance, where he helped grow assets from $500 million to $5 billion; and Aaron Schnarch, former CEO of Coinbase Custody. Additional hires come from Anchorage Digital, HSBC, and Broadridge Financial. Schnarch said that while DeFi is a remarkable innovation, it has achieved limited institutional adoption because current products fall short of meeting the traditional finance bar.

The DAO-approved budget releases $14 million immediately, with the remainder unlocking in tranches tied to milestones. About $28 million is earmarked for operations and engineering, including the development of Compound V4, while roughly $24 million is allocated to growth. Of that growth pool, $8 million to $10 million is designated for institutional partnerships rather than liquidity provider incentives. Compound V4’s hub-and-spoke design routes capital through a central hub instead of separate markets, aiming to give professional counterparties tighter risk controls. The project says more than 10 partners have committed and over 20 more are in talks.

COMP’s price received a boost following the announcement, rising more than 10% in 24 hours to trade around $18, though it remains about 98% below its 2021 record. By comparison, Aave, the leading DeFi lending protocol, holds more than $14.6 billion in total value locked. Compound has processed around $480 billion in deposits and borrowing since its 2018 launch.

The pivot reflects a wider DeFi trend toward institutions. In July, former Ethereum Foundation staff launched Ethereum Institutional as a front door for banks and asset managers. Tokenized real-world assets reached about $65 billion by May, and more than 2,000 institutions disclosed Bitcoin holdings through spot ETFs in Q1. Standard Chartered projects the DeFi sector could reach $2.7 trillion by 2030. Still, some observers warn that credentials alone are not enough: Himanshu Sahay of Arch Lending called the budget and bench a serious move but said institutions are underwriting structures, not teams.