Compound DAO has approved a two-year development plan worth $52 million and restructured its management, betting on RWA, institutional credit, compliance access, and a new protocol to revive growth.

Compound's locked assets have fallen from a peak of about $12 billion in September 2021 to about $1.2 billion, a decline of approximately 90%; during the same period, Aave's locked assets were about $14.8 billion, more than ten times the size of Compound.

The new Executive Director Aaron Schnarch previously served as CEO of Coinbase Custody; Christopher Donovan is the COO, formerly COO of NEAR Foundation; Steven Liu is the CPO, who helped Maple Finance grow its assets from $500 million to $5 billion; Leo Eikelman is the CTO, with team members from Anchorage Digital, HSBC, and Broadridge.

Of the $52 million, about $28 million is allocated for operational expenses such as engineering, integration, risk, and marketing, while approximately $24 million is for growth projects like institutional onboarding, market liquidity, and curator expansion. Initially, only $14 million is available, with the remaining $38 million managed by a seven-member funding management committee under a multi-signature custody arrangement, linked to milestones such as engineering team allocation, V3 production-level integration tools, primary curator access, and V4 testnet.

Compound plans to build RWA access, whitelisting, legal entity connections, KYC/AML, risk management, and credit infrastructure for institutional clients. This transformation means the protocol will no longer primarily rely on permissionless retail lending but aims to become the on-chain backend for banks, asset managers, and institutional-level credit.

In terms of market mechanisms, the demand side consists of asset managers, enterprises, and crypto institutions seeking liquidity through tokenized government bonds, stablecoins, on-chain collateral, and institutional credit; the supply side includes institutions, curators, market makers, and custodians looking for on-chain yields, collateral efficiency, and auditable risk exposure. Compound is using its budget to subsidize engineering, liquidity, and institutional customer acquisition, attempting to redirect TVL back into the protocol; Coinbase Custody, Anchorage, and traditional finance backgrounds help reduce institutional entry friction, but Aave, Morpho, and Maple have already occupied niches in liquidity, modular markets, and institutional credit, so Compound must demonstrate capital efficiency through real borrowing demand rather than incentivized funds.

Source: Public Information