Compound (COMP) - a DeFi lending protocol that allows users to earn interest on their cryptocurrencies by depositing them into one of several pools, supported by the platform.
Contents:
What is Compound (COMP)?
When a user contributes tokens to the Compound pool, they receive cTokens in return. These cTokens represent a person's share of the pool and can help to redeem the underlying cryptocurrency at any time. For example, by depositing ETH into a pool, you will receive cETH in return. Over time, the exchange rate of these cTokens against the underlying increases, meaning that you can exchange them for more of the underlying asset than you originally invested.
On the other hand, borrowers can take out a secured loan from any Compound pool by depositing collateral. The maximum loan-to-value ratio varies, depending on the collateral asset. The paid interest rate varies, depending on the borrowed assets, and borrowers may face automatic liquidation if their collateral falls below a certain maintenance threshold.
Since the mainnet launch of Compound in September 2018, the platform has skyrocketed in popularity and recently surpassed over $800 million in total locked value. Compound was founded in 2017 by Robert Leshner and Geoffrey Hayes. They go on to hold leadership positions at Compound Labs, Inc, the software development firm behind the Compound protocol.
Platform benefits
The Compound Protocol is a series of interest rate markets, powered by the Ethereum blockchain. Users contribute their assets to a large liquidity pool, which, in turn, provides crypto loans to other users, and they share the interest that borrowers return to the pool.
Project features:
| Open lending platform | It allows anyone who deposits supported Ethereum tokens to earn interest on their balance or take out a loan. |
| Control | Owners of the native platform governance token - COMP - can propose changes to the protocol, discuss and vote for the implementation of changes, proposed by others, without any involvement of the Compound team. |
Every day, COMP tokens are distributed among users of the protocol, in proportion to the number of transactions in a particular crypto coin. In each market, 50% of the allocation goes to suppliers and 50% to borrowers. As soon as the user has earned 0.001 COMP, they are automatically transferred to his address.
Where to buy a project token?
Compound cryptocurrency cannot be earned by traditional mining, all coins are issued exclusively by developers. Total supply of 10 million COMP, circulating supply of 6 million coins. COMP is currently available for trading on hundreds of cryptocurrency exchange platforms, including:
- Coinbase Pro;
- Binance;
- Huobi Global.
You can trade it against most other popular cryptocurrencies as well as a range of fiat currencies, including the US dollar (USD), Indian rupee (INR) and Australian dollar (AUD).