Compound (COMP) is created by Compound Labs Inc. which has been founded in 2017 by Robert Leshner and Geoffrey Hayes. Their current headquarters is located in the San Fransisco Bay Area. The company is backed by world class investors as a16z, Baincapital, Coinbase, Paradigm, Polychain Capital and Dragonfly Capital and has raised a total of $33.2 million in funding over 2 rounds. Their latest funding was raised by a16z on Nov 14, 2019 from a Series A round.
Compound’s mission is to fill the gap of crypto interest, as mentioned why they started: “the majority of crypto sit idle on exchanges and in wallets, without yielding interest”.
Compound initially launched on the mainnet in September 2018 and upgraded to v2 in May 2019. The platform now supports various crypto on their market as BAT, ETH, USDC, USDT, DAI, WBTC. REP, ZRX and SAI. Compound has been audited and formally verified. As of May 2020, Compound has transitioned to community governance whereby COMP token-holders and their delegates can debate, propose, and vote on all changes to Compound’s protocol.
Compound is an DeFi (Decentralized Finance) autonomous interest rate protocol that lets users earn interest or borrow assets against collateral. Simply said an ask and demand platform between crypto lenders and crypto borrowers. Their cToken, COMP (not be mistaken for Compound Coin), is an ERC-20 asset token that runs on the Ethereum Network, much like the Compound Smart Contract itself. But, also allows its owner to delegate voting rights to an address of their choice as in the owner’s own wallet, another user, an application or a DeFi expert. To be able to have a vote, you need at least 1% of COMP in your wallet.
The Compound Governance has a Delegated Proof of Stake consensus model, similar as EOS. By placing COMP directly into the hands of users and applications, an increasingly large ecosystem will be able to upgrade the protocol, and will be incentivized to collectively steward the protocol into the future with good governance.
The current total supply of COMP is 10,000,000, but the maximum supply remains unknown.
Currently CoinCompare supports four providers to buy and sell Compound (COMP), being Coinmerce, Bitladon and Coinbase. The provider with the best price to buy COMP is always shown below in the orange button.
Individuals with long term investments (“HODLers”) in ETH and Ethereum related tokens can use a Compound Market as a source of additional returns on their investment. For example, a user that owns Basic Attention Token (BAT) can supply their tokens to the Compound protocol, and earn interest (denominated in BAT) without having to manage their asset, fulfill loan requests or take speculative risks.
Bitladon offers a similar interest service with Tether (USDT), TrueUSD (TUSD), Paxos Standard (PAX), and Dai (DAI). Leave the tokes in the wallet on their platform to earn interest. Simple as that!
Your supply, availability for borrow and interest is managed and visible in your dashboard. In your dashboard you are able to connect a Coinbase Wallet, a Ledger or your wallet from Metamask to make transactions easier. The currency of your amount in your balance is set to dollar ($) per default, but can be changed to euro (€), pound (£) or ETH.
Each time you interact with a Compound Market by supplying, borrowing, withdraw, or repaying the crypto, COMP will be automatically transferred into your wallet. If you have at least 0.001 COMP, at any time, you can manually withdraw all undistributed COMP. You can view all accrued COMP per wallet address, by searching the Compound Governance Explorer profile pages. For example, hereby the profile of the first community member that created a successful proposal.
“The Money Market Protocol“, in this paper they introduce the decentralized protocol which establishes money markets with algorithmically set interest rates based on supply and demand, allowing users to frictionlessly exchange the time value of Ethereum related assets. Read more in their whitepaper found in the link below.
By Jeroen Modified 05/10/2020