Compound Finance, one of the oldest decentralized lending protocols, has replaced its leadership team and approved a record $52 million budget as it pivots to institutional clients — a bid to revive growth after the value of assets locked on the platform tumbled to $1.2 billion from a peak of $12 billion in September 2021.

The budget is the largest ever approved by Compound's decentralized autonomous organization, underlining the scale of the commitment.

From DeFi Pioneer to Institutional Venue

Compound pioneered decentralized lending when it launched in 2018, popularizing the concept of earning yield on crypto deposits without intermediaries. The protocol has processed roughly $480 billion in deposits and borrowing volume since inception, according to the company.

But it has lost significant ground to competitors: Aave now holds more than 11 times Compound's total value locked at $14.8 billion, according to DeFiLlama.

Under the new strategy, Compound will develop real-world asset offerings, partner integrations, and credit infrastructure designed to meet traditional finance compliance and technical standards.

A Leadership Team Built for TradFi

The new team brings institutional pedigree:

  • Christopher Donovan, chief operating officer — previously COO of the Near Foundation
  • Steven Liu, chief product officer — scaled Maple Finance from $500 million to $5 billion in assets
  • Aaron Schnarch, executive director — former CEO of Coinbase Custody

Other appointees join from Anchorage Digital, HSBC, Broadridge Financial, and Maple Finance.

"DeFi is a remarkable innovation; however, it has achieved limited institutional adoption," Schnarch said in a statement. "Current product offerings fall short of meeting the traditional finance bar, especially as it pertains to compliance and technical requirements."

DeFi's Broader Institutional Shift

The move reflects a sector-wide transition. Total value locked across DeFi has fallen more than a third since the start of the year to roughly $70 billion, driven by a broad market correction, compressed yields, and a run of protocol exploits — including the $292 million KelpDAO hack in April.

Yet the sector is still forecast to reach $2.7 trillion by 2030, with tokenized real-world assets among the fastest-growing segments, according to a Standard Chartered projection.

"Retail participation is a fraction of what it was, and the chain has quietly become a venue for settlement, execution and interaction between financial institutions," said Ran Hammer, chief business officer at Orbs. "Bringing in leadership that speaks that language is exactly the right direction."

Analysts caution that institutions will demand more than credentials. "They aren't underwriting teams, they're underwriting structures," said Himanshu Sahay, co-founder and CTO of Arch Lending.