## Introduction

This proposal will change the current oracle system from using Coinbase as the primary reporter of prices to Chainlink [Price Feeds](http://data.chain.link). Uniswap v2 is still used as an anchor (circuit breaker) and the anchor deviation window will change from 20% to 15%. As a precaution, the community multisig has the ability to engage a failover that will switch a market’s primary oracle from the current Price Feeds to Uniswap v2.

### Proposal Call

Change the Comptroller oracle from [0x4007B71e01424b2314c020fB0344b03A7C499E1A](https://etherscan.io/address/0x4007B71e01424b2314c020fB0344b03A7C499E1A) to [0x841616a5CBA946CF415Efe8a326A621A794D0f97](https://etherscan.io/address/0x841616a5CBA946CF415Efe8a326A621A794D0f97)

### Oracle Update Details

Each asset supported on the Compound market has a corresponding USD-paired price feed reference contract and a validatorProxy contract (which allows for the UniswapAnchorView (UAV) oracle contract to be updated by the community as new markets are added). When the reference contract of a Price Feed is updated by a decentralized network of oracle nodes with a new aggregated price value, the transmitter of that data also calls the validate() function on the market’s validatorProxy contract. When this function is called, the validatorProxy calls validate() on the UAV, which queries Uniswap v2 to check if the new price is within the Uniswap v2 TWAP anchor. If valid, the UAV is updated with the asset’s price. If invalid, the price data is not stored. Additional details on this process can be found in this comment [here](https://www.comp.xyz/t/oracle-infrastructure-chainlink-proposal/1272/55) on the Compound forum.

[Here](https://aws1.discourse-cdn.com/standard17/uploads/compoundcommunity/original/1X/7033ce2e313f56c40441ba6dd9d900b0c2b244a7.png) is a visual example of how BAT/USD price feed is used, though this flow is the same for all asset markets.

The frequency of updates for each price feed depends on two triggers:

* Deviation threshold - when the off-chain price of an asset is witnessed to have moved more than x% of the previously reported price, an on-chain update is initiated.

* Heartbeat threshold - If x minutes have passed without an update, a new on-chain update is initiated.

More information can be found on [data.chain.link](http://data.chain.link/). Example: [ETH / USD](https://data.chain.link/eth-usd).

Price update events can be witnessed on the[ Etherscan events tab](https://etherscan.io/address/0x841616a5CBA946CF415Efe8a326A621A794D0f97#events).

The UniswapAnchorView token configuration has two additional fields: reporter & reporterMultiplier.

* reporter: The address that submits prices for a particular cToken. This is always a ValidatorProxy contract that is always called by a price feed reference contract for each relevant price update posted by oracle nodes. In this case, 0xeBa6F33730B9751a8BA0b18d9C256093E82f6bC2 is the reporter of the price of BAT.

* reporterMultiplier: Used to transform the price reported by the price feeds to the correct base unit that the UniswapAnchoredView expects. This is required because the price feeds report prices with different decimal placement than the UniswapAnchoredView.

Audit report: Trail of Bits was commissioned for audit of the contracts.[ToB Audit report](https://drive.google.com/file/d/1TsOXhBLenStjdd2mxF1Sfmmh_Na9X527/view?usp=sharing)

Forum discussion and additional details: [Oracle Infrastructure: Chainlink Proposal](https://www.comp.xyz/t/oracle-infrastructure-chainlink-proposal/1272)

#### Why

In late January I wrote on the [forum](https://www.comp.xyz/t/building-a-medianizer/1031) “Compound NEEDS to improve the current oracle infrastructure as a matter of safety and growth. I think it is evident to users that the current solution is not ideal and not close to ideal. The event that occurred in November with Dai liquidations was preventable….In addition to preventing the November event from transpiring again, I think it is also in the protocol’s best interest to improve the oracle situation so Compound can safely support more assets.”

Five months, two forum threads, 114 forum replies, numerous calls, countless messages, and finally, we have a robust solution to improve the oracle system. This has been a long process, going over and re-reviewing many nuanced details with the community. Building in public is not always easy, but it was an insightful process and I am excited to see more assets on Compound. I look forward to continuing to improve the oracle system as the crypto landscape changes.

Oracle Improvement

LINK is a widely distributed token, with significant liquidity both on and off-chain. As a new market, it will be introduced with the following conservative market parameters: 
 - Collateral Factor: 0%
 - Reserve Factor: 25%
 - COMP Speed: 0.0014625 (also set for UNI, BAT, ZRX)
 - Interest Rate Model (JumpRateModelV2)
 - 2% APY borrow base rate
 - 20% APY borrow rate at kink
 - Kink at 80% utilization
 - 100% APY borrow rate at 100% utilization

A 0% collateral factor provides a “no risk” approach to adding the new asset, and allows the protocol to test if the interest rate model and other parameters are a proper fit. Once the market develops there can be an immediate follow-up proposal to increase the collateral factor based on market performance, stress tests etc.

The Reserve Factor, COMP Speed, and Interest Rate Models were chosen based off the parameters for similar assets (UNI, ZRX, and BAT)

#### Oracle
The current oracle and TUSD proposal's new oracle is compatible with LINK there is no change needed.

#### cLINK Contract
The cLINK contract is based on the most recently deployed cToken (cWBTC2) implementation, which includes a sweepToken enhancement for governance to collect accidentally sent tokens received by the proxy contract.

#### Special Thanks

Special thanks goes out to MasterofNonce for writing the CAP description; Arr00 for helping write simulations; mistertom, jmo, blck, and rleshner for helping decide the parameter proposals; and the community in general for the support and TRiLeZ to organize and deploy the necessery contract and the whole proposal.

#### References
 - [cLINK contract](https://etherscan.io/address/0xface851a4921ce59e912d19329929ce6da6eb0c7#code)
 - [Forums discussion](https://www.comp.xyz/t/add-market-link/1516)
 - [Integration scenario](https://github.com/TRiLeZ/compound-protocol/blob/clink-integration/spec/sim/0010-clink-integration/hypothetical_clink_integration.scen)
 - [Updated mainnet.json](https://github.com/TRiLeZ/compound-protocol/blob/clink-integration/networks/mainnet.json)
 - [Updated token deploy script used](https://github.com/TRiLeZ/compound-protocol/blob/update-deploy-token/script/saddle/deployToken.js)

Add LINK Support

This proposal adds [TrueUSD](https://etherscan.io/token/0x0000000000085d4780B73119b644AE5ecd22b376) as a supported asset.  
 
TUSD is a 1:1 US dollar backed stablecoin. TUSD is the only stablecoin that has [real-time, 24/7 attestations](https://real-time-attest.trustexplorer.io/trusttoken) from Armanino, a top US accounting firm, providing assurance that the token is fully collateralized by US Dollars. 
 
## Market Parameters 
This proposal sets TUSD with a collateral factor of 0%, reserve factor of 7.5%, and unlimited borrow cap. These parameters follow the values set by USDT, with 0% collateral factor. The collateral factor can be proposed to be higher with a future proposal. 
 
 This proposal updates the Compound price feed to peg TUSD to $1, similarly to USDC. By using a peg, weakness in the underlying asset will not change collateral requirements for users borrowing TUSD.
 
[The interest rate model](https://etherscan.io/address/0xfb564da37b41b2f6b6edcc3e56fbf523bd9f2012) for TrueUSD relies on the same model as cUSDT and cDAI, JumpRateModelV2. 
 
## Contracts 
cTUSD is an upgradeable cToken contract that has been modified to accommodate potential transfer fees in the underlying token. 
 
The cToken contract has been reviewed by OpenZeppelin and the Compound team. The cTUSD contract has been reviewed by the TrustToken and Ethworks teams. 
 
The case for why TUSD benefits compound has been discussed by the [compound community here](https://www.comp.xyz/t/trueusd-listing-proposal-stay-tuned/1490)

Add TUSD Support

In [Proposal 41](https://compound.finance/governance/proposals/41), we began the process to migrate WBTC to a modern upgradable cToken contract.

The new WBTC cToken has become widely adopted, with $2.2B supplied.

This proposal continues the deprecation process for the legacy WBTC market, following the process established for SAI and REP.

The Reserve Factor for the legacy asset will be raised to 100%, which removes the supply interest rate, and supplying and borrowing (new usage) will be disabled. The legacy WBTC cToken will still be effective collateral, and existing users will not be liquidated or materially impacted.

Finally, the proposal completes the deprecation of REP, by lowering its collateral factor to 0%, nine months after [Proposal 17](https://compound.finance/governance/proposals/17) disabled new usage of the asset.

[Discussion](https://www.comp.xyz/t/legacy-market-migration-wbtc/1333)

Legacy market maintenance: WBTC and REP

Following the upgrade to the [Governor Bravo](https://compound.finance/governance/proposals/42), it's now possible to update the parameters of the Governance system.

Over the past year, a recurring request has been a [formal analysis period](https://www.comp.xyz/t/formal-analysis-period-for-larger-proposals/70) before proposals enter the voting state. This would allow the community and developers additional time to audit new contracts and proposals for errors, and users the opportunity to move COMP or delegations prior to a vote commencing.

This proposal updates the proposal [voting delay](https://compound.finance/docs/governance#voting-delay) from 1 block to 13140 blocks (2 days), and the voting period from 17280 blocks (2.63 days) to 19710 blocks (3 days). These parameter changes will improve the community’s ability to prepare for votes and increase the security of the protocol.

Governance Analysis Period

### Introduction
Governor Bravo has been a community effort for the past few months to bring governance to the next stage. This proposal transfers Compound governance to the new Governor Bravo contract. If this proposal is successful, all future Compound governance calls should be sent to [Governor Bravo](https://etherscan.io/address/0xc0da02939e1441f497fd74f78ce7decb17b66529).

### Proposal Calls
The first two calls reimburse Compound Labs $27k that was paid to Open Zeppelin for the audit from the cUSDC reserves. The following two calls award COMP bounties to Arr00 and Blurr for organizing and executing the Governor Bravo project. The following call sets Governor Bravo as the pending admin, and the last call initiates Governor Bravo, accepting the Timelock admin.

### Governor Bravo Details:
Governor Bravo has been developed by members of the community in the open for the past few months. The new contracts have been fully audited by Open Zeppelin, are fully covered by extensive test suites, have been simulated by forking simulations, and have been running on the kovan testnet. 

The new features are as follows:
- Upgradable implementation 
- Settable parameters (proposal threshold, voting period, voting delay)
- Abstain vote option
- Optional string voting reason
- Proposer can always cancel their proposal (until execution)
- Removal of the guardian
- Continuous proposal id logic

#### PS:
To celebrate the alphas who voted on Governor Alpha, we will be releasing a limited edition Compound NFT claimable by anyone who voted meaningfully on Governor Alpha prior to this proposal once Governor Bravo is initiated.

#### References:
Development forum [post](https://www.comp.xyz/t/governor-bravo-development/942)
Proposal forum [post](https://www.comp.xyz/t/governor-bravo-proposal/1384)
[Github PR](https://github.com/compound-finance/compound-protocol/pull/91)
[Open Zeppelin Audit](https://blog.openzeppelin.com/compound-governor-bravo-audit/)

Migration to Governor Bravo

This proposal begins the [migration of legacy cToken contracts to the latest cToken contracts used by the protocol](https://www.comp.xyz/t/managing-ctoken-versions/1220), starting with the WBTC market.

The next-generation cTokens have two years of development & feature advantages over their immutable counterparts. Standardizing the protocol to use the latest cTokens will reduce "tech debt" and allow us to roll out new features to all markets.

WBTC was chosen as the first market to upgrade because of its recent proposal, which highlighted the need to be able to de-risk the market with new features (like supply caps, and protocol liquidation fees). After this migration, the community can proceed with upgrading BAT, ZRX, USDC, and finally ETH.

### Upgrade Process
A new WBTC cToken has been deployed, using the latest upgradable cToken contract and implementation. This proposal *supports* the new market, then *switches* the COMP Distribution from the prior market, to the new market. The market then inherits a 65% Collateral Factor, to match the legacy market.

The new WBTC cToken uses a modern interest rate model, that governance can update the parameters for. Initially, the parameters are set to an inflection point at 80% utilization, and a maximum interest rate of 40%, which resembles the legacy market.

The two WBTC markets will run in parallel, with users incentivized (but not required) to begin using the new contracts. When the legacy market is small enough, it can be deprectated like SAI and REP.

### Contracts

The new cWBTC contract, and its implementation, rely on existing cToken contracts; no code was modified for this proposal, though new contracts were deployed, and peer reviewed.

Discussion: [comp.xyz](https://www.comp.xyz/t/legacy-market-migration-wbtc/1333)

Legacy market migration: WBTC

**Summary**

We propose to start a program called the Compound Grants Program (“CGP”), which will provide funding to projects, ideas, and events that benefit Compound and its stakeholders. If approved, funding for the program will come from Compound’s [treasury ](https://etherscan.io/tokenholdings?a=0x3d9819210a31b4961b30ef54be2aed79b9c9cd3b), which currently holds ~200k COMP (~$95mm as of 03/01/21). As a reminder, the treasury currently accrues 0.5 COMP per block, spends 0.352 COMP per block on liquidity incentives, and saves the balance of 0.148 COMP per block for governance by tokenholders.

The program will be a pilot. For this reason, we believe it’s prudent to limit the program’s dollar value to $1mm per quarter and the length to two quarters for a cost of $2mm (4,444 COMP) over six months.

Since it’s not practical to solicit a community vote for every disbursement, we propose forming a small and nimble committee that has the power to administer the grants at its own discretion (limited by the aforementioned dollar and length caps). We suggest forming a committee of eight members: one lead member to head the program and seven reviewing members to review the lead’s work and assist with program operations. The committee will operate with a 4 of 7 multi-sig (only reviewers will be part of the multi-sig).

As compensation for administering the program, we propose the lead be paid $5k upfront and $100 per hour thereafter with a cap of 30 hours per week for a maximum compensation of $83k (184 COMP). In total, we are asking for a maximum of ~5,000 COMP to fund the grants (4,444 COMP), program setup and operational costs (444 COMP), and compensation for the program lead (184 COMP). All unspent funds will be returned to the community treasury at the conclusion of the CGP.

**Purpose**

Decentralized projects are living and breathing communities with a variety of stakeholders. These stakeholders include project team/contributors, tokenholders, users, partners, and for certain projects, liquidity providers. The goal for the CGP is to nurture Compound’s ecosystem to benefit all of these stakeholders. To be more specific, the grants program aims to:

* Grow Compound’s ecosystem by funding development happening on top of it. Funding development focused on helping Compound grow is critical to the project’s long-term success.
* Fund ideas that benefit Compound that would otherwise not receive funding. Many good ideas are left unexplored because they fail to receive funding. We intend to make sure as few good ideas as possible are underfunded or unfunded.
* Strengthen goodwill by providing funding for community-led ideas. Funding projects, ideas, and events brought forth by community members will encourage more active participation by the community. It will have the added benefit of nourishing goodwill. A well-nourished goodwill keeps community members loyal and happy, which in turn, encourages new members to join what they see is a thriving community.

**Program Scope**

The CGP was heavily inspired by the [Uniswap Grants Program ](https://gov.uniswap.org/t/rfc-uniswap-grants-program-v0-1/9081) (“UGP”), which received approval from the community to deploy a maximum of $750k per quarter for two quarters. It’s difficult to deploy a meaningful amount of money to ecosystem grants without compromising on quality. While we believe all of these ecosystems will be enormous in the future, it’s important for us to be practical today by matching the grants budget to the size of the ecosystem.

To that end, the pilot program will deploy a maximum of $1mm per quarter and run for two quarters. We have no way of knowing whether this amount of money is overshooting or undershooting the needs of the ecosystem — we will only find out *after* running the experiment. For example, if we find out $2mm is not enough money to fund all of the high quality opportunities, we as a community may decide we need to create a larger allocation for grants. On the flipside, if we find out $2mm is too much, all unspent funds will be returned to the community treasury for use at a later time.

As part of the program, our intention is to fund projects, ideas, and events that *directly* benefit Compound and its stakeholders. While there may be opportunities to fund projects, ideas, and events that *indirectly* benefit Compound, these opportunities fall outside the scope of this program.

Not all opportunities applying for grants will benefit the Compound ecosystem equally. To help us prioritize which ideas to fund, we propose the following buckets:

*High priority*

* Protocol and parameter development. Apart from acts of stewardship and generosity, there is little to no incentive for community members to propose technical updates to the protocol. With no carrot with which to motivate community members to propose changes, the protocol isn’t able to innovate as quickly as it should be innovating in a dynamic and competitive market. We should note that in a minority of cases community members did receive payment for work done (for example, see the work done by Gauntlet on the [COMP Contributor Grants ](https://compound.finance/governance/proposals/30) proposal), although here too, the incentive to contribute was not well-designed since it required Gauntlet to front audit and development costs before knowing the proposal to pay them would pass. To encourage community members to propose changes, the CGP will fully or partially pre-fund development and audit costs. In doing so, we hope to encourage more proposals, which will lead to more innovation and as a result, a far better Compound for all of us.
* Code audits. Making technical updates to the protocol is risky business: smart contracts are immutable and control billions of dollars in user funds. An error in a technical update can have serious consequences. Because of this, it is considered best practice to have an auditor review the proposed update for soundness prior to its submission. Unfortunately, these audits are [expensive ](https://www.comp.xyz/t/compound-contributor-grants/756/6), particularly for individual contributors who need to pay for them out of pocket. We intend to provide grants that pre-fund audit costs for soon-to-be proposals. We hope this will encourage more individual contributors to propose technical updates to the protocol.
* Business development / integrations. A greater amount of liquidity makes Compound a better product for all users. To grow liquidity, Compound should be integrated with as many applications as possible. To that end, we aim to fund integrations that grow usage of Compound. In funding integrations, we will effectively be funding the business development function for the protocol.
* Advertising and sponsorships. It will be important to get the word out there about this program. The more people there are that know about the CGP, the more applications we should expect to receive. To spread the word about the program, we will spend funds to advertise the CGP on podcasts, newsletters, and other mediums that attract the audience we want to attract.

*Medium priority*

* Hackathons. It’s very likely that there exist uses for Compound that haven’t been explored yet. Hackathons are a fantastic way to explore design spaces, and the CGP intends to sponsor them.
* Bounties. This one speaks for itself: bug fixes and minor protocol updates will be covered by the CGP.

*Low priority*

* Miscellaneous improvements. It’s difficult to know ahead of time all of the grant applications that will come through. Just because an application does not fit neatly into one of the above buckets doesn’t mean it’s not valuable to the Compound ecosystem. So long as an application benefits Compound directly, we will consider it for a grant.
* Applications for miscellaneous improvements to Compound fall into this bucket. Because the scope of this bucket is broad, we consider it to be low priority compared to the narrowly scoped buckets above.

While we did our best to prioritize items among each of the three buckets, we are confident that the above list is not all-inclusive. We expect to receive grant applications for phenomenal ideas that we simply can’t think of today. The committee asks the community for the right to exercise discretion to fund ideas that are beneficial to Compound but are not part of the scope outlined above.

**Process and Timeline**

If approved, the program will begin shortly after this proposal passes and end six months following the start of the program. (In other words, if the proposal passes on 3/15/2021 and begins on 3/22/2021, it will end on 9/22/2021). The program will run on a rolling process: we will welcome applications at any point in time during the program length! We will stop accepting applications two weeks before the end of the program (during these two weeks, we will start wrapping the program up, which will include evaluating the last of the applications and returning unspent funds to the treasury).

We will source potential grants via an applications process. (We will be sharing the application soon after this proposal passes).

Once an application is received, CGP committee members will discuss the application and evaluate it in the context of its benefit to Compound and its stakeholders. If the committee approves the application, funds will be paid out to the receiving party on the timely basis. If the committee does not approve the application, the soliciting party will be notified as to why the application was not approved and, if applicable, what steps need to be taken to have the application approved in the future. All approved grants and their amounts will be disclosed to the community publicly and on a timely basis.

Finally, a member of the CGP committee will participate in the bi-weekly Compound community developer calls. We will attend the call, listen to what the community thinks should be funded, and present some of the newly funded grants.

**Committee Members**

The CGP committee will consist of eight members: one lead and seven reviewers. We believe the best committees share two features: first they must be capable, and second they must be motivated to actively participate. We believe this committee shares these two vital features.

*Lead*

[Larry Sukernik ](https://twitter.com/lsukernik) (Sheepshead Bay, LLC)

*Reviewer*

[Getty Hill ](https://twitter.com/getty_hill) (Grapefruit Trading)

*Reviewer*

[Aparna Krishnan ](https://twitter.com/aparnalocked) (Opyn)

*Reviewer*

[Monetsupply ](https://twitter.com/monetsupply) (Independent)

*Reviewer*

[Min Teo ](https://twitter.com/_minteo) (ConsenSys)

*Reviewer*

[Leighton Cusack](https://twitter.com/lay2000lbs) (PoolTogether)

*Reviewer*

[Jesse Walden ](https://twitter.com/jessewldn) (Variant)

*Reviewer*

[Nick Cannon](https://twitter.com/inkymaze) (Gauntlet)

The lead will be tasked with managing and operating the program while reviewers will have a duty of holding the lead accountable. To guarantee accountability, the committee will operate with a 4 of 7 multi-sig managed by the reviewers (note that the lead is not part of the multi-sig). In other words, four out of seven reviewers will need to sign the transaction for a grant to be approved and disbursed.

**Committee Compensation**

We propose the lead be paid $5k upfront and $100 per hour thereafter with a cap of 30 hours per week for a maximum compensation of $83k (~184 COMP). Since the majority of the work will be performed by the lead, they will be the only committee member to receive payment as part of the program pilot. Payments to the lead will be approved by the reviewers and made according to the following schedule: $5k upfront, with the balance paid at the end of each quarter (i.e., if the program begins on 3/22/21, the lead will be paid $5k on 3/22/21, and the again on 6/22/21 and 9/22/21 based on hours worked).

The funds for both the program and the lead’s pay will be allocated to the CGP multi-sig from the Compound treasury. Running the CGP will come with setup and operational costs; we will set aside approximately 10% of the CGP budget to cover these costs. All unspent funds will be returned to the community treasury at the conclusion of the CGP.

**What Does Success Look Like?**

We expect success to come in two forms: one that’s measurable and the other that’s of the “you know it when you see it” type.

Measurable success metrics:

* Number of projects, ideas, and events funded
* Community engagement (e.g., increased activity on forums, Discord, and so forth)
* Increase in number of applications

“Know it when you see it” success metrics:

* Improved sentiment and goodwill within the community
* Improvement to Compound’s brand and positioning in the market

**Conclusion**

If approved, the CGP will begin accepting applications for grants on a rolling basis shortly after its approval. To assist with the evaluation of potential grants, each grant will be classified into three buckets: high, medium, and low. High priority grants will be funded first; medium priority grants will be funded second; low priority grants will be funded last.

This program is a pilot. As such, we intend to keep the budget lean for a maximum disbursement of 5,000 COMP over six months across grants, setup and operational costs, and lead compensation. Make no mistake: this is an experiment. If the CGP works, Compound may want to graduate the program from a pilot to a full-time endeavor. If it doesn’t work, we will learn why it didn’t work and what should be done differently. Most of us are COMP holders here. That gives the privilege to try something that’s never been tried before at a meaningful scale: to let the test subjects run the experiments.

Compound Grants Program

This change updates the collateral requirements for three collateral assets: ZRX, BAT, and WBTC

As mentioned on the [forums](https://www.comp.xyz/t/zrx-bat-and-wbtc-parameter-update/1244), WBTC collateral poses a threat to the financial health of the Compound protocol. Currently, WBTC risk is 8 times worse than it was 2 weeks ago and now accounts for 99% of the risk in the protocol across all assets. We are moving to lower the collateral factor for WBTC from 75% to 65%. This will reduce (but not remove) the aforementioned risk, and we will re-evaluate if the proposal passes before proposing to lower it further to 0.6%. If liquidity and volatility for WBTC improve, we will be sure to take that into account. 

We are also changing the collateral factors for both ZRX and BAT, raising those slightly to improve capital efficiency for borrowers. We realize that bundling these changes might make the decision more complex for voters. However, these additional changes are small and were largely unopposed in [the last proposal](https://compound.finance/governance/proposals/38) that merely failed to reach quorum amidst high gas prices.

ZRX, BAT, and WBTC Parameter Update

## Summary 

We’re excited to propose changes to the Compound protocol that will improve capital efficiency for borrowers. We’ve run extensive stress tests of the protocol, the results of which we have shared [here](https://www.comp.xyz/t/risk-parameter-update-february-2021/1144). These results identify BAT and ZRX as two of the lowest risk collateral assets, and we are increasing the collateralFactor for these two assets to allow users to better take advantage of these markets.

Vote By Signature

47

Total Proposals

Recent Proposals