What is Compound (COMP) token ?

The Compound project was introduced by Robert Leshner and Geoffrey Hayes who used to held top positions at Postmates (an online food delivery service). Besides, they occupy the positions of CEO (Leshner) and CTO (Hayes) at Compound Labs, Inc, a software development company that launched the protocol. The operating principle of Compound reminds a traditional bank. Users of the platform deposit cryptocurrencies and earn interest on a regular basis. But the core difference is that the company doesn't keep the assets. Everything is governed by smart contracts and no person or a group can control the fund flow or interfere in the process. The project offers floating interest rates calculated by a special algorithm that analyzes supply and demand for a particular crypto. Also, 10% of the earned interest goes to the project's dev team. Any user has an opportunity to withdraw the initial asset from any pool at any time. Since the launch of Compound's mainnet in September 2018, the platform has skyrocketed in popularity and its locked value exceeded 800 million USD.

Compound Protocol?

The DeFi protocol Compound was developed for helping users to borrow and lend crypto, as well as earn interest by depositing their tokens into one of several pools supported by the platform. When somebody deposits tokens, this user gets cTokens that stand for the share and can be used to buy back the basic crypto.

Let's consider such an example: you have deposited ETH and received cETH in return. Over time, the exchange rate of cTokens to the initial asset has risen. That means that now you can exchange them for a larger amount of the underlying asset than you originally invested. This is how the interest is distributed on the platform.

At the same time, borrowers may take a secured loan from any one of Compound pools by posting a bond. The maximum loan-to-value ratio varies depending on the collateral asset. The interest rate paid depends on the borrowed asset, and borrowers may face automatic liquidation of the loan if it drops below a certain provision threshold.

Compound (COMP) token

COMP crypto

Native Compound's token
COMP is an Ethereum ERC20 native Compound's token that was launched for decentralized protocol governance.
COMP holders
COMP holders can vote on changes and submit improvements
The crypto is automatically distributed among the users who interact with the platform in a way, for example, deposit funds, repay a loan, etc.
Compound Governance Explorer
The Compound Governance Explorer tool allows to track the process of voting and distributing as well as to see the leaderboard
Demand in the market
Every day, approximately 2,880-2,900 COMP tokens are distributed among users in proportion to the supply and demand in the market
The best market activity is observed with the DAI stablecoin

Сompound coin price and figures

COMP is an Ethereum ERC20 native Compound's token that was launched for decentralized protocol governance. COMP holders can vote on changes and submit improvements.

The list of possible changes includes:

  • adding new coins;
  • coin delisting;
  • correcting the calculation algorithms;
  • ecosystem management methods, etc.

COMP tokens are distributed among protocol users in proportion to the number of transactions in a particular cryptocoin. In each market (for instance, ETH or DA), suppliers get 50% of the total amount and the remaining half goes to borrowers. A user automatically receives each 0.001 COMP earned.

The cost of ETH, DAI, BAT, REP, ZRX, and WBTC is a price median from Coinbase Pro, Bittrex, Poloniex, and Binance. Chart variations making up at least 1% are captured. For security reasons, the price fluctuation is limited to the level of 10% per hour.

At the very beginning, COMP cost nearly 99 USD. The first price rise was registered on July 22 (334 USD), then it was slightly decreasing, but stayed mostly at the level of 130-170 USD. In December 2020, the COMP price started growing and in the middle of February 2021 exceeded 500 USD. According to many experts, COMP coin is a good 2021 TOP-10 cryptos candidate along with AAVE, UNI, YFI, SNX, and MKR.

Why is COMP unique?

According to the developers of Compound, most cryptocurrencies are idle on exchanges and bring their holders no profit as they could do. The project aims to change this situation with the help of the lending platform that allows anyone to deposit Ethereum-based tokens, to earn interest easily, or to get a secured loan.

The way Compound is governed by the community makes it different from many similar protocols. COMP token holders have a non-illusory opportunity to influence the project's development vector without interference from the dev team.

This protocol has proven itself to be a reliable tool for creating a source of passive income for making money from depositing crypto. The entire system is managed automatically, and the best interest rates are calculated based on analyzing the current situation in a particular virtual asset market.

However, the interest rates are mostly lower compared to staking. The result depends largely on the level of market activity. For example, BAT and ZRX coins usually bring more profit than stablecoins.

Where to buy COMP token?

Currently, COMP tokens are available on more than 100 crypto exchanges, such as Binance, Huobi Global, P2PB2B. They are traded in pairs with the most popular coins as well as a range of fiat money, for example, USD, INR (Indian rupee), AUD (Australian dollar), etc.

You can buy COMP to make a long-term investment or trade it applying various strategies. Compound has a reputation of a reliable DeFi project, that is why COMP coin is of interest to many investors.

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