Compound (COMP)

What is Compound (COMP)?

Compound is a lending platform built on Ethereum that enables users to permissionlessly borrow or lend from a pool of assets. Rather than interest rates being set by individuals, they are determined algorithmically based on the proportion of assets lent out.

Outstanding Features

What is the project trying to achieve?

• Long-term investors can deposit their idle assets into Compound to earn additional yield.
• Ethereum Dapps (Decentralized applications) can take advantage of the massive liquidity that Compound provides.
• On the other hand, users are willing to borrow assets as they do not want to sell their tokens, given that they bought those tokens at a great position. Their needs can be: Leveraging profits, arbitrage, etc

What is the unique selling point?

According to Compound, the majority of cryptocurrencies sit idle on exchange platforms, doing nothing for their holders. Compound looks to change this with its open lending platform, which allows anybody who deposits supported Ethereum tokens to easily earn interest on their balance or take out a secured loan — all in a completely trustless way.

Compound’s community governance sets it apart from other similar protocols. Holders of the platform’s native governance token — COMP — can propose changes to the protocol, debate and vote whether to implement changes suggested by others — without any involvement from the Compound team. This can include choosing which cryptocurrencies to add support for, adjusting collateralization factors, and making changes to how COMP tokens are distributed.

These COMP tokens can be bought from third-party exchanges or can be earned by interacting with the Compound protocol, such as by depositing assets or taking out a loan.

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