Compound Proposes $12 Million USDC Allocation to Non-Custodial Vault

The Compound Finance Management Committee has proposed allocating up to $12 million worth of USD Coin (USDC) from the DAO treasury to a non-custodial vault based on Ethereum. The proposal suggests that the DAO entrusts treasury funds to external managers while maintaining control over the funds, combining repo, term assets, and leveraged yield strategies to enhance treasury returns. The target total return is presented as SOFR plus 200 basis points. The non-custodial vault executes strategies through smart contracts and an on-chain authority structure without the manager directly holding the assets. According to the proposal, the DAO can recover about 35% of the funds within a day and approximately 80% within a week. Compound is recently broadening its focus towards institutional investor-centered strategies, and this proposal reflects a shift in the management approach of the DeFi DAO treasury. The proposal must undergo governance review and operational condition confirmation, with yield targets and liquidity conditions being merely design objectives for the operation.

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