Find out about Compound (COMP), it’s easy!

What is Compound? 

Compound is a DeFi protocol developed on Ethereum. In particular, the project revolves around decentralised loans, i.e. the granting of sums in different cryptocurrencies with no intermediary between the contracting parties. In crypto lending, lenders deposit their crypto into “liquidity pools”, which other users can draw upon to take the decentralised loan. In return, the lenders receive a percentage of the amount loaned, in addition to “cTokens” reflecting the sum paid into the pool. For example, lenders receive cETH, cSOL or cBTC based on the quantity of ETH, SOL or BTC deposited. 

Why follow Compound?

Compound is a founding project for Decentralised Finance (DeFi). In fact, it was among the very first DeFi service protocols together with MakerDAO and Aave, contributing to a key value proposition that sets the crypto industry apart from traditional finance: providing a use case for cryptos otherwise stuck in wallets. In addition, Compound has an active community stimulated by the distributed governance of the COMP token, with a total supply of just 10 million. 

How was it created?

Compound Labs Inc. is behind the project. Robert Leshner and Geoffrey Hayes came up with the idea back in 2017. Today, they both hold managerial roles within the company and have stated that they personally use some of the best-known DeFi platforms. Compound does not have a particularly large team, but they keep the relationship with the community alive through a Discord channel and a constantly updated forum.