Compound is a protocol on the Ethereum blockchain that establishes money markets, which are pools of assets with algorithmically derived interest rates, based on the supply and demand for the asset. Suppliers (and borrowers) of an asset interact directly with the protocol, earning (and paying) a floating interest rate, without having to negotiate terms such as maturity, interest rate, or collateral with a peer or counterparty.
Who are the founders of Compound?
It started as a company founded by Robert Lechner and Geoffrey Hayes. Their goals are to improve the traditional financial system including transactions, inefficiency and centralized system.
Purpose of Compound
Compound Finance token is a Governance token that allows holders to vote on system improvement’s proposals or update other policies such as Collateral Factor (increasing token volume), liquidation incentives (updating interest rate) and listing a new token in the pool, etc.
Key Metrics
| Ticker | COMP |
| Token Name | Compound finance |
| Token Type/Protocol | ERC-20 |
| Total Token Supply | 10,000,000 COMPS |
| Current Circulating Supply | See Coinmarketcap |
| Market Capitalization | See Coinmarketcap |
| Token Creation Date | 2017 |
| Can it be mined? | No |
Insights
- Compound protocol is a protocol on the Ethereum blockchain that enables users to borrow and lend various digital cryptocurrencies in pools of assets with algorithmically derived interest rates, based on the supply and demand for the asset.
- Lending: Users deposit cryptocurrency to the Compound protocol to use as loan collateral, and users simultaneously become a lender. When it is staked in the Compound pool, the coins would change into Tokens, a medium currency in Compound protocol. If users deposit Ethereum, they will receive cETH. When users deposit their cryptocurrencies within a period, they will receive their asset and interest.
- Borrowing: Compound allows users to frictionless borrow from the protocol, using Tokens as collateral, for anywhere use in the Ethereum ecosystem. After that, the system approves the Borrow Balance for borrowing assets. The borrow balance borrows cryptocurrencies from the pool, and the pool will transfer tokens to the borrower, and the borrower needs to pay the interest to the pool.
Official Website: https://compoundlabs.xyz/
Whitepaper: https://compound.finance/documents/Compound.Whitepaper.pdf
Note
As cryptocurrency and digital tokens involve high risks, investors may lose all their investment money and should study information carefully, making investments according to their own risk profile.