What is Compound (COMP)?

Compound (COMP) is a decentralised lending platform that enables users to borrow cryptocurrencies by pledging collateral and earning interest on their deposited cryptocurrencies. With the use of its COMP token and a decentralised governance system, it intends to offer a more effective and transparent way to obtain credit and earn interest on cryptocurrencies.

The History of Compound

The founder of Compound, Robert Leshner, a former economist at the Federal Reserve, created the company in 2018 with the intention of offering a more open and efficient way to obtain loans and earn interest on cryptocurrencies. The COMP native token for the platform was introduced in June 2020 to promote participation and ecosystem governance.

The Use Case of Compound

Compound enables users to earn interest on their deposited cryptocurrency balances, which may then be lent to borrowers in exchange for interest payments. By putting up collateral in the form of additional cryptocurrencies, users can also borrow cryptocurrencies. Supply and demand play a role in determining interest rates, which are dynamic throughout time.

With intentions to add more in the future, Compound now supports a number of cryptocurrencies, including Ethereum, Bitcoin, USDC, DAI, and others. The platform offers a simple user interface that makes it simple for users to deposit, withdraw, and keep track of their money.

Additionally, the Compound protocol's governance is decentralised, allowing holders of COMP tokens to suggest and vote on platform modifications like changing interest rates or integrating additional cryptocurrencies.