What is Compound?
Compound is a DeFi lending service which provides interest to users who park their cryptocurrency funds in any of the several liquidity pools maintained by the platform. The platform issues redeemable cTokens to users in exchange for their crypto coins. The amount of originally deposited coins that can be redeemed through cTokens gradually increases with the passage of time. This is the system through which interest is credited for depositing funds. Users can also borrow funds from the liquidity pool by depositing collateral and paying interest. COMP is the platform’s native governance token.
Why buy COMP?
COMP lets users earn interest on their unused funds as well as borrow crypto easily. Its system of democratized governance through the COMP token distinguishes it from other lending protocols. COMP holders can vote on important platform decisions without interference from Compound’s development team. COMP can be earned by participating in depositing and borrowing activities on the platform, or obtained by trading on any popular exchange. The supply of COMP is capped at 10 million. About one-third of the total supply is currently in circulation, with a variable emission rate which is fixed through voting.
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