Compound (COMP)

About

Compound (COMP) is a decentralized finance (DeFi) protocol built on the Ethereum blockchain. It allows users to lend and borrow cryptocurrencies without traditional intermediaries like banks. By using smart contracts, Compound automates lending and borrowing processes, providing a trustless and permissionless environment. Users can deposit cryptocurrencies into lending pools to earn interest, while borrowers can access loans by posting collateral. Compound's native token, COMP, incentivizes participation and serves as a governance token, allowing holders to vote on platform decisions. Compound operates by issuing cTokens, which represent deposits in the lending pools. These cTokens can be traded freely but are redeemable only for the underlying cryptocurrency. The protocol adjusts interest rates based on supply and demand, offering competitive rates compared to traditional finance. Compound's decentralized nature eliminates the need for KYC checks or credit scores, making it accessible to anyone with a Web3 wallet. The platform has grown significantly since its launch in 2018, becoming a major player in the DeFi ecosystem.