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What is compound (COMP) and what are its advantages?

by Financial Economy

The founder and CEO of the Compound is Robert Leshner. Compound is a De-Fi, open accessible smart contracts system based on ERC-20. Compound provides convenience for crypto money loan taking transactions. Compound blocks the crypto money balances of the borrowers with the protocol and brings together the crypto money lenders on the same platform. The interest rate to be taken from the borrowers and defined to the lenders varies according to the supply-demand balance of the lent cryptocurrency. The interest rate is updated for each new block created. The amount of debt is always payable and can always withdraw the loaned amount. Information about ” What is compound (COMP) and what are its advantages?” is in rest of the article.

What is compound (COMP) and what are its advantages?

The compound lending system is generally not different from other lending and borrowing protocols. The difference is that the assets that are blocked in the system are converted into Compound tokens.  The cToken used in the compound system is generally to keep the collateral token as a new token as long as it remains blocked. You can browse here for information about Basic Attention Token (BAT).

When you give your Ethereum balance to the Compound system, it holds your assets as cToken and lends it. Whenever you want, you can withdraw the cryptocurrency you deposit with the interest you earn as the asset you provide as collateral, ie Ethereum. Although it is criticized that the Compound protocol is still a center, its founder stated that it will gain a decentralized structure in a short time.

What is Comp?

COMP is the crypto currency used for the management of the Compound management system. Owners of COMP crypto currency will have votes for changes and updates to the Compound protocol. The COMP crypto currency will be launched in a total of 10,000,000 COMP units.

How is compound (COMP) mining done?

When you provide your crypto money assets as collateral to the Compound protocol, a certain amount of cToken is earned according to the supply-demand balance of the cryptocurrency that you provide as collateral and the collateral. You can withdraw your collateral to your account at any time with main asset and interest income.

Information about decentralized finance:  https://en.wikipedia.org/wiki/Decentralized_finance

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