Compound Treasury receives B- credit rating from S&P Global Ratings
Cointelegraph
Published May 09, 2022 01:45PM ET
Updated May 09, 2022 03:20PM ET
On Monday, decentralized finance, or DeFi, protocol Compound Treasury announced that it received a credit rating of B- from S&P Global Ratings. As told by the team at Compound, this represents the first time a major credit agency has issued a rating for an institutionalized DeFi protocol. The S&P Global Ratings' investment suitability scale ranges from AAA (extremely strong) to D (in default). A score of B- indicates the issuer can meet financial commitments, though vulnerabilities to business, financial and economic conditions persist.
Regarding Compound's rating specifically, S&P Global cites the uncertain regulatory regime for stablecoins such as USD Coin (USDC), stablecoin-to-fiat convertibility risks and the Treasury's "limited capital base" along with a 4.00% per annum return obligation for the decision. However, the rating agency says that the Compound protocol's record of zero losses measured in USDC partially mitigates the risks of the offering.
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Written By: Cointelegraph
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