What is Compound?
The founder and CEO of compound is Robert Leshner. Compound is a de-Fi, Open-Access Smart Contracts system based on the ERC-20. Compound cryptocurrency provides convenience for credit retrieval.
Compound blocks the cryptocurrency balances of borrowers through the protocol and brings together cryptocurrency lenders on the same platform. The interest rate to be received from borrowers and defined to lenders varies according to the supply-demand balance of the cryptocurrency borrowed. Each new block created updates the interest rate. The amount owed can be paid at any time, and you can always withdraw the amount borrowed into your account.
What are the advantages of Compound?
The Compound lending system is not different from other lending and receiving protocols with general lines. The difference is that assets that are kept blocked in the system are converted to Compound tokens.
CToken used in the Compound system is generally the retention of the guaranteed token as a new token as long as it remains in the block. When you give your Ethereum balance to the Compound system, it holds and lends your asset as cToken. At any time, you can withdraw the cryptocurrency that you leave a deposit with, along with the interest that you earn as an asset that you provide a deposit with, i.e. Ethereum.
Cryptocurrency assets that you lend are signed as cToken and passed into the system when they are received as collateral.
The interest rate is determined according to the supply-demand balance of the type of cryptocurrency you provide collateral with in the market.
Although it has been criticized that the Compound protocol is still a center, its founder has stated that it will soon have a decentralized structure.
Just as you can lend through the Compound protocol, you can borrow cryptocurrency if you keep a certain collateral value in your wallet. If your debt is not paid, your collateral will be confiscated.
What is COMP?
COMP is the cryptocurrency used for the management of the Compound management system. People with COMP cryptocurrency will vote for changes and updates to the Compound protocol.
COMP cryptocurrency will be released with a total of 10,000,000 COMP units. Currently, the total amount offered is 2,561,279 comp.
How is Compound mining done?
When you provide your cryptocurrency assets as collateral in the Compound protocol, a certain amount of cToken is earned according to the amount you provide collateral and the supply-demand balance of the cryptocurrency that you provide collateral for. You can withdraw your deposit to your account at any time with the main asset and interest income.