Info of Compound
Compound is a decentralized finance (DeFi) protocol that allows users to lend and borrow cryptocurrencies on the Ethereum blockchain. Compound's native token is COMP, which is used to govern the protocol and incentivize participation. Users who supply or borrow assets on Compound earn COMP tokens as well as interest, creating a compounding effect on their returns.
Compound was launched in 2018 by Robert Leshner and Geoffrey Hayes, who aimed to create a transparent and autonomous money market that operates without intermediaries.
As a DeFi protocol, Compound offers a novel way for crypto holders to earn passive income and access liquidity. The nature of operations is a Liquidity Pool Asset (LPs), where lenders will transfer crypto assets and the pool creates liquidity in return for receiving interest. Borrowers entering the asset pool need to borrow and borrow money in exchange for collateral with an asset that Compound supports.
Compound supports various cryptocurrencies, such as ETH, DAI, USDC, WBTC, and UNI, and allows users to switch between different markets and interest rates. Compound also enables users to leverage their assets and create complex financial strategies, such as yield farming, flash loans, and collateral swaps. However, Compound also involves significant risks, such as smart contract bugs, liquidation penalties, market volatility, and regulatory uncertainty.
Compoundm as a groundbreaking and innovative project that aims to democratize finance and empower users with more control over their assets, is one of the most popular and influential DeFi projects.