What is Compound?
Compound is a pioneering DeFi lending protocol on Ethereum that allows users to earn interest on deposits and borrow assets against collateral. It was one of the first protocols to kick off the 'DeFi Summer' of 2020.
The protocol introduced the concept of governance token distribution to users (liquidity mining), which COMP's launch in June 2020 popularized across the entire DeFi ecosystem.
COMP is the governance token that gives holders voting power over protocol upgrades, collateral factors, interest rate models, and treasury allocations. Compound III (Comet) is the latest version focusing on capital efficiency.
COMP Tokenomics
COMP has a maximum supply of 10 million tokens. The low supply was innovative for DeFi governance tokens. COMP is distributed to protocol users who supply or borrow assets, aligning user interests with protocol growth.
COMP Historical Price Performance
COMP launched in June 2020 and sparked 'DeFi Summer' by pioneering liquidity mining. It reached $911 in May 2021. The token's launch fundamentally changed how DeFi protocols distributed tokens and attracted users.
Frequently Asked Questions
DeFi lending allows users to deposit crypto assets to earn interest and borrow against their deposits. Compound automates this through smart contracts without intermediaries.
COMP's launch in June 2020 is widely credited with starting DeFi Summer. By distributing COMP tokens to users who supplied or borrowed, it created a template that dozens of protocols copied.
Compound III (Comet) is the latest version focusing on a single borrowable asset per deployment. This simplifies risk management and improves capital efficiency compared to the multi-asset Compound V2.
COMP holders can create and vote on proposals that modify the protocol. A minimum of 100 COMP is needed to create proposals, and a quorum of 400,000 votes is required for proposals to pass.
What is DeFi lending?
DeFi lending allows users to deposit crypto assets to earn interest and borrow against their deposits. Compound automates this through smart contracts without intermediaries.
What started DeFi Summer?
COMP's launch in June 2020 is widely credited with starting DeFi Summer. By distributing COMP tokens to users who supplied or borrowed, it created a template that dozens of protocols copied.
What is Compound III?
Compound III (Comet) is the latest version focusing on a single borrowable asset per deployment. This simplifies risk management and improves capital efficiency compared to the multi-asset Compound V2.
How does Compound governance work?
COMP holders can create and vote on proposals that modify the protocol. A minimum of 100 COMP is needed to create proposals, and a quorum of 400,000 votes is required for proposals to pass.
Risk Warning
Cryptocurrency prices are highly volatile and can change rapidly. The information on this site is provided for informational purposes only and does not constitute financial, investment, or trading advice.