Compound Protocol Grants Guide (CGP 2.0)

Based on real data from 126 applications (53 approved, 73 rejected) Source: Questbook platform — "Compound dapps and protocol ideas (CGP 2.0)", March 2026

Program Overview

Compound Grants Program 2.0 (CGP 2.0) funds projects building dapps, tools, and protocol improvements for the Compound lending protocol on Ethereum. This is a DAO-governed grant program — reviewers are community members who stake their reputation on approvals.

Key Statistics

Budget Ranges (Approved Applications)

• Budget data not consistently structured in this program

What CGP 2.0 Reviewers Look For

1. Direct Compound Protocol Integration

• Deep integration: Your project must meaningfully use Compound v2 or v3 (Comet)
• Compound v3 focus: CGP 2.0 prioritizes projects leveraging the newer Comet architecture
• cToken / COMP mechanics: Show you understand how cTokens, interest rates, and COMP distribution work
• Protocol improvements: Improvements to liquidation efficiency, interest rate models, risk parameters

2. DeFi Ecosystem Value

• Composability: How does your project compose with other DeFi protocols?
• TVL impact: Can your project increase Compound's TVL or usage?
• Risk analysis: DeFi projects must demonstrate awareness of smart contract and oracle risks
• Audits: For any contract work, include audit plans (or explain why not needed)

3. Technical Depth

• Solidity contract architecture
• Integration with Compound's Comet interface
• Testing strategy including forked mainnet tests
• Gas efficiency analysis

4. DAO Alignment

• Reference Compound Governance and how your project fits
• Compound community forum engagement shows seriousness
• COMP holder value — can you articulate how this benefits COMP holders?

5. Milestone-Based Delivery

• CGP 2.0 uses milestone-based payment — each milestone unlocks the next tranche
• Be very specific about what each milestone produces
• Include a "milestone 0" (planning/architecture) to demonstrate preparedness

Common Rejection Patterns

• Team credibility issues: 30/73 (41%)
• Weak milestone structure: 22/73 (30%)
• Out of ecosystem scope: 12/73 (16%)
• Budget unjustified: 12/73 (16%)
• Duplicate / existing solutions: 11/73 (15%)

Approved Proposal Examples

Example 1: 0

Description: 0

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Example 2: 0

Description: 0

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Example 3: 0

Description: 0

Application Checklist

• Clear explanation of which Compound version (v2 / v3 / Comet)
• Technical architecture showing Compound integration points
• Smart contract code snippets or pseudocode for core functions
• DeFi risk analysis (oracle risk, liquidation risk, smart contract risk)
• Audit plan or explanation of why audit is not needed
• Milestones with unlock criteria for each payment tranche
• Team with DeFi / Solidity experience
• Compound community forum link or prior engagement
• How project benefits COMP holders / increases Compound usage
• Post-grant maintenance plan (who maintains contracts?)

Compound-Specific Tips

1. Comet vs Compound v2: CGP 2.0 strongly favors Compound v3 (Comet) — understand the Comet architecture before applying
2. Risk parameters: Show you understand how Compound manages collateral factors and liquidation incentives
3. Governance: Frame your project as something COMP holders would want to fund — write a short Compound governance forum post alongside your application
4. Gas efficiency: Compound is on Ethereum mainnet — gas costs matter enormously; show optimization
5. Composability: The best Compound grant projects are usable by other DeFi protocols — plan for that

Resources

• Compound Developer Docs: https://docs.compound.finance
• Compound Governance Forum: https://www.comp.xyz
• Comet (v3): https://github.com/compound-finance/comet
• Questbook: https://questbook.app

Data: AgentRel analysis of Questbook GraphQL API. 126 applications analyzed, March 2026.