Compound

Compound COMP

Compound, a decentralized lending protocol, is a chain that attracts users to cryptocurrency by depositing them into a pool supported by the platform. By depositing tokens to a compound pool, users can earn Comp Tokens. 

Since the release of its mainnet in 2018, the platform has become way more popular.

The compound protocol offers a token called COMP. There are 10 million tokens in total; They present 42% of the tokens to the users. 2,312 COMPs are distributed daily, and this process will go on until 2024, when they will stop the distribution. But what happens to the rest?

24% is given to the shareholders of Compound Labs, matching token, and the company leading the lending platform. Approximately 22% is for the founders and staff. Almost 8% are for those who participate in the project’s governance, and the remaining 4% are for future staff members.

The token on this platform is a “governance token,” which means users that own the token can use them to vote changes to the protocol.

What is Compound?

Defi projects tend to use cryptocurrencies to make better financial products without intermediaries to give users better control over their money. The Compound is one of the most notable projects in the Defi market. 

This platform established the “liquidity mining” (yield farming ) in which users lend their crypto to a platform, and in return, the network often gives them interest or share in a cut of the transaction fees.

Users can earn Comp tokens for participating in liquidity mining which allows users to maximize the earning potential of their deposited crypto.

The Compound uses Ethereum’sEthereum’s smart contracts, which fundamentally replace intermediaries with computer programs.

Like most DeFi (decentralized finance) protocols, this is also a system of accessible smart contracts manufactured on Ethereum. This protocol lets borrowers receive loans, and lenders provide loans by locking their assets into the platform. The supply and demand of each crypto asset determine the rates received and paid by lenders and borrowers.

Compound benefits

Not all digital currencies can do something for their holders. Compound seeks to change this and allow people who deposit supported Ethereum tokens to earn interest on their balance or get a secured loan through its open lending platform.

COMP holders can propose or vote for changes to the protocol and debate the changes other users have proposed (the protocol’s team is not involved in this process). These proposals include: which crypto to add support for, making changes to the distribution of the token, and adjusting collateralization factors.

You can earn COMP tokens by buying from a third-party exchange platform or interacting with the protocol, like taking out a loan or depositing assets.

This platform is mostly like other decentralized lending protocols; however, it stands out since it tokenizes the assets locked in the network using Comp tokens. Comp tokens are the ERC20 versions, and they represent the user’s funds deposited in the protocol.

Compound background

Robert Leshner and Geoff Hayes founded Compound in 2017. These two graduates of the University of Pennsylvania released the network in 2018. They raised 8.5 million dollars in funding the same year, and the funding went up to 25 million dollars in 2019 and 1 billion dollars worth of assets locked in 2020.

Both founders had previously been active in high-profile roles at Postmates (an online food delivery service). They both have executive positions at Compound Labs ( the software development company that supports the protocol). Leshner is the CEO, and Hayes is the CTO.

In June 2020, the firm launched the COMP token. The protocol accidentally overpaid users in COMP (worth millions of dollars) in a smart contract vulnerability that brought about a problem with smart contracts, resulting in users and projects losing assets. Users must have the right to trust that the code works correctly.

compound-governance-token Compound
$179.02

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FAQs

Best way to buy Compound in Australia

There are a limited number of Comp tokens in circulation (about 3.3 million). The rate of COMP emission depends on the changes to the platform over time since voters can reduce or increase the emission rate by voting for proposals through community governance.

This token is available on hundreds of cryptocurrency exchange platforms; however, if you wish to find a reliable platform in Australia, we suggest Bitunivex.

You need to ensure that the platform you choose meets your requirements. First, Research the token or coin, next research the platform, and then read the charts to know what to do and when to execute it.

How can one research a cryptocurrency exchange platform? You can start by going through the exchange’s regulations and customer services.

Are you interested in buying Compound? Do you live in Australia and want to find an exchange platform here? Bitunivex is an experienced global cryptocurrency that lets you exchange fiat and crypto. It is also a wise choice for Australians since the exchange is in Sydney.

Bitunivex can give you superb customer service, including providing an account and a wallet on the platform.

Is Compound real and safe?

Smart contracts manage everything on Compound. These contracts act to mint Comp Tokens after ERC20 assets and Ethereum are deposited and let users redeem their stake using Comp Tokens.

The protocol uses a collateralization factor for all assets on the platform to ensure the over-collateralization of every pool at all times. If the collateral goes below the minimum maintenance level, they will see it at a 5% discount to liquidators. In this way, they pay down some of the loans and return the rest to an acceptable collateralization factor. This provides a safety net for lenders and helps liquidators earn something.

Can I cash out Compound anytime?

Here at Bitunivex, a trustworthy global platform, we can offer safe, fast, and secure transactions. 

If you want to cash out your tokens, you can use the platform. We can handle your requests in a few minutes. 

You can go through the regulations to check the services we provide for our users, including wallet service.

Make your account here. Buy, sell and trade easily. We offer to help you with any possible questions.