TL;DR

Compound has launched new vaults on Polygon with Gauntlet and Morpho, aiming to regain market share against competitors like Aave.
The collaboration uses Morpho’s infrastructure, which has sparked controversy due to the potential reliance on a direct competitor’s technology.
The deal has raised criticisms due to possible conflicts of interest with Gauntlet and the dependence on external technology.

Compound has launched a new series of vaults on Polygon in collaboration with Gauntlet and Morpho, two recognized companies in the DeFi industry.

These vaults are designed for assets like USDC, WETH, USDT, and WPOL, and are structured on Morpho’s technology, a direct competitor of Compound. Through this agreement, the protocol aims to regain market share against competitors like Aave, but it has also caused significant controversy regarding the potential reliance on Morpho’s infrastructure.

Gauntlet, a key part of this agreement, has been criticized by some members of the community. While the partnership has the potential to generate substantial revenue, some believe it puts Compound’s autonomy at risk, as it will give up part of its core technology. The collaboration will allow COMP to generate between $2 and $3 million in revenue over the next two to three years, but it will do so using external infrastructure, which some interpret as a decrease in the protocol’s competitiveness in the long run.

The deal has raised questions regarding potential conflicts of interest with Gauntlet, which already has relationships with both Compound and Morpho. Some users of the lending protocol question the decision to use Morpho’s infrastructure when it has already developed its own technology. Additionally, while Gauntlet claims it will not take any fees from the vaults initially, there is the possibility that fees could be introduced in the future, which could benefit Morpho.

Can’t Compound Innovate on Its Own?

Morpho, which started as an optimizer on top of Compound, has become an independent protocol with a modular architecture. This evolution has allowed it to offer a more efficient technical alternative, which could be an incentive for COMP when facing more modern solutions.

The situation highlights a reality of the DeFi industry: competition and adaptation are key to survival. Although Compound’s strategy seeks to revitalize its presence in the market, the integration with Morpho’s technology could raise more questions than answers about the protocol’s future and its ability to innovate on its own

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Filed under: News - @ March 13, 2025 5:26 pm