What is Compound (COMP) Coin
Compound is a DeFi lending protocol that allows users to earn interest on their cryptocurrencies by depositing them into one of several pools supported by the platform. When a user deposits tokens to a Compound pool, they receive cTokens in return. These cTokens represent the individual’s stake in the pool and can be used to redeem the underlying cryptocurrency initially deposited into the pool at any time.
For example, by depositing ETH into a pool, you will receive cETH in return. Over time, the exchange rate of these cTokens to the underlying asset increases, which means you can redeem them for more of the underlying asset than you initially put in — this is how the interest is distributed.
On the flip side, borrowers can take a secured loan from any Compound pool by depositing collateral. The maximum loan-to-value (LTV) ratio varies based on the collateral asset, but currently ranges from 50 to 75%. The interest rate paid varies by borrowed asset and borrowers can face automatic liquidation if their collateral falls below a specific maintenance threshold.
Since the launch of the Compound mainnet in September 2018, the platform has skyrocketed in popularity, and recently passed more than $800 million in total locked value.
- Compound is an algorithmic, autonomous interest-rate protocol on the Ethereum blockchain. Compound has grown to become one of the cornerstones of the DeFi industry. As of June 25th 2020, Compound was the world’s largest DeFi protocol with more than $500 million worth of cryptoassets being locked and over $900 million being supplied.
- Built for developers, Compound creates efficient money markets where assets can be supplied and borrowed by individuals without any restriction (e.g., KYC). Interest rates are compounded at a block-level on the Ethereum blockchain, and no central party is required.
- Compound relies on the concept of over-collateralization: individuals can supply tokens to earn yield while borrowers can provide assets that are used as collateral to borrow other assets. For instance, someone can deposit USDC, earn the USDC lending rate, while using the USDC to borrow ETH, and pay the ETH borrowing interest rate.
- The borrowing and lending rates are defined algorithmically based on real-time market dynamics. When the asset supply increases as more users deposit this asset, it leads to a decrease in borrowing/lending rates. In contrast, if the demand for borrowing an asset increases, it leads to a rise in the asset interest rates. Assets (e.g., REP) supplied in the protocol are swapped to cTokens (e.g., cREP), whose value appreciates over time to reflect the block-by-block compounding effect.
- The COMP token is an Ethereum-based token, used for the governance of the protocol. Supporting a vote delegation process, COMP token-holders (and their delegates) can discuss, propose, and vote on any future changes to the Compound protocol. For instance, they can include new assets, or change asset-specific requirements on Compound (e.g., required collateralization margins)
How To Buy Compound (COMP) Coin
1.Step: Everyone who is planning to invest in or benefit from the advantages of cryptocurrencies wonders the answer to Where to buy Comp coin question. First, you need an online wallet to buy cryptocurrencies. You need to sign up to Binance exchange from here, which is preferred globally to buy coins and you can buy coins with fiat currencies. You can quickly access many assets and trade types such as altcoins, future markets, and margin by creating a Binance account.
2.Step: Complete your registration by typing an email to the email section or typing your phone number on the section available on the mobile tab. Click/tap on the “Buy Crypto with Your Credit Card” option after the registration and verify your identity.
3.Step: Continue the process by typing the amount you would like to invest and your preferred cryptocurrency. Keep in mind that for security reasons, your credit card/debit cardholder information must match with the name available on your account. If you would like to buy cryptocurrencies with a wire transfer, you need to follow the Buy Crypto > Third-Party Payment options to pick your preferred fiat currency to buy cryptocurrencies.
4.Step: If the cryptocurrency you are planning to buy is not available on the list, buy USDT “You can always redeem 1 USDT Coin for US $1.00”. You can buy any coin you want with USDT by following Buy-Sell > Classic steps. We have provided the answer to How to buy Compound coin, now you can view the cryptocurrencies you bought by clicking on the wallet summary available on your Binance account. You can sell your assets when their value increases, or you can withdraw them to your bank account in desired fiat currency.
How Much is a Compound (COMP) Coin
Compound (COMP) coin prices are updated instantly in USD, Euro, Sterling currencies in the following table.
Compound (COMP) Coin Review
You can learn more about Compound (COMP) coin reviews and information on cryptocurrencies by visiting their official page available in the following.
Website https://compound.finance/ Whitepaper https://compound.finance/documents/Compound.Whitepaper.pdf Github https://github.com/compound-finance/ Medium https://medium.com/compound-finance Documentation https://compound.finance/docs Discord https://compound.finance/discord