Compound’s price today is $41.37**, with a 24-hour trading volume of **$54.62 million. The circulating supply stands at 9.39 million COMP, out of a maximum supply of 10 million COMP.
What Is Compound?
Compound is an Ethereum-based decentralized lending platform that enables users to borrow or lend cryptocurrencies without intermediaries. Interest rates are adjusted algorithmically based on supply and demand. Its native token, COMP, serves as a governance token, allowing holders to vote on protocol upgrades and decisions.
Key Features of Compound
- Decentralized Lending/Borrowing: Users earn interest by supplying assets or borrow against collateral.
- Algorithmic Interest Rates: Rates adjust dynamically based on pool utilization.
- Governance with COMP: Token holders propose and vote on protocol changes.
- Multi-Asset Support: Includes ETH, USDC, DAI, WBTC, and more.
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History of Compound
- 2018: Founded by Robert Leshner; raised $8.2 million in seed funding.
- 2019: Secured $25 million in Series A funding led by Andreessen Horowitz.
- June 2020: Launched COMP governance token, becoming a top DeFi project.
- May 2021: Peak Total Value Locked (TVL) at $12.45 billion.
How Does Compound Work?
- Yield Farming: Users supply assets to liquidity pools to earn interest.
- Collateralized Borrowing: Borrowers deposit collateral (e.g., ETH) to take loans.
- Smart Contracts: Automated protocols handle transactions securely.
- COMP Rewards: Suppliers and borrowers earn COMP tokens daily.
Example: If you deposit USDC, you earn interest and a share of 1,139 COMP distributed daily across the platform.
Use Cases for COMP Token
- Governance Voting: Influence protocol upgrades and treasury decisions.
- Passive Income: Earn COMP by lending/borrowing on the platform.
- Incentivized Participation: Rewards align users with the platform’s long-term success.
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FAQs
What determines COMP’s price?
COMP’s value is driven by demand for governance rights, platform usage, and broader crypto market trends.
Is Compound safe?
Compound’s smart contracts are audited by OpenZeppelin and Trail of Bits, but risks like smart contract bugs or market volatility exist.
How do I earn COMP tokens?
Supply or borrow assets on Compound to automatically accrue COMP rewards.
Can I borrow without collateral?
No—Compound requires over-collateralization (e.g., deposit $150 to borrow $100).
What’s the difference between Compound and traditional banks?
Compound operates without intermediaries, using blockchain for transparent, global access.
Final Thoughts
Compound revolutionized DeFi by automating lending/borrowing and decentralizing governance. Its COMP token empowers users to shape the protocol’s future while earning rewards. For those exploring DeFi, Compound offers a transparent, efficient alternative to traditional finance.
Keywords: Compound (COMP), DeFi lending, COMP token, yield farming, decentralized finance, governance token, crypto borrowing.
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