Compound Labs Considers Launching a Dedicated Foundation to Streamline Operations

Compound is one of the most popular DeFi lending protocols on Ethereum. According to DefiLlama data, the platform currently has $2.5 billion in total value locked (TVL).

DeFi lending protocol Compound is considering launching a dedicated foundation to streamline operations and support the protocol’s long-term development.

The team behind the protocol, Compound Labs, is planning to open a discussion with the community about establishing a non-profit Compound Foundation. The foundation would be independent of Compound Labs and any existing entities, offering a reliable layer of coordination and leadership for the protocol’s stakeholders.

The goal of the foundation would be to provide a model similar to what the Uniswap Foundation offers its community, facilitating governance, development, and communication among contributors.

Why a Compound Foundation?

In an April 1 post, Compound Labs noted that establishing a foundation has become standard practice across major DeFi ecosystems.

The firm added that the protocol’s early operational model was basic, reflecting DeFi’s experimental nature during its early days. However, as the platform matured, the lack of a central structure created difficulties in managing critical processes.

Despite outsourcing areas like risk assessment to Gauntlet and security auditing to OpenZeppelin, the absence of a formal foundation has created unnecessary complexity.

The team stated:

“With the upcoming development of v4 and growing engagement in the community forums, along with the progressive decentralization of the Compound ecosystem and the pullback of involvement from Compound Labs, we’ve seen the growing need for more consistent structure. In response, we believe it’s time to explore the creation of a Compound Foundation.”

The foundation would be an independent non-profit organization focused on supporting the long-term development and maintenance of the Compound protocol.

It would be tasked with coordinating major initiatives, facilitating efficient communication, and ensuring the alignment of the protocol’s operations with the broader community's vision.

Furthermore, the foundation would be responsible for managing the protocol's treasury and ensuring the responsible use of collected fees.

Before moving ahead, Compound Labs plans to open the conversation to the community on its forums to gather feedback.

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