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On Monday, decentralized finance, or DeFi, protocol Compound Treasury announced<\/a> 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<\/a> 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.\u00a0<\/p>\n Regarding Compound’s rating specifically, S&P Global cites the uncertain regulatory regime for stablecoins<\/a> such as USD Coin (USDC<\/a>), 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.<\/p>\n With regards to the development, Compound Treasury’s general manager Reid Cuming\u00a0commented “S&P’s rating helps our institutional clients more easily understand the opportunity and risks of crypto-powered cash management.” As part of ongoing discussions with S&P Global, Compound Treasury’s ratings could be upgraded in the event of greater regulatory clarity for digital assets or a longer track record of solid performance.<\/p>\n The Compound Treasury and its yield is supported by its underlying DeFi lending Compound protocol. At the time of publication, 301,650 suppliers have injected<\/a> $6.94 billion worth of digital assets into the protocol, while 9,275 borrowers have taken out $1.83 billion worth of loans. While above the savings rates of major U.S. banks, the yield from Compound Treasury is only accessible<\/a> to accredited investors or those meeting significant income and net worth thresholds.\u00a0<\/p>\n<\/div>\n