The live price of Compound is - per (COMP / USD) with a current market cap of $396.76M USD. 24-hour trading volume is - USD. COMP to USD price is updated in real-time. Compound is -% in the last 24 hours with a circulating supply of 9.03M.
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Compound is a decentralized money market protocol built on the Ethereum blockchain.
To build a multi-asset money market fund that internally facilitates liquidity across different tokens.
Compound is an Ethereum-based protocol that establishes a liquidity pool where interest rates are algorithmically determined by asset supply and demand. Suppliers and borrowers interact directly with the protocol to earn or pay variable interest rates. Compound aims to solve the liquidity problem through a money market system, as most crypto assets remain idle on exchanges and wallets, generating no interest for holders.
The COMP token incentive model subsidizes both lenders and borrowers, effectively giving "equity" to increase yields for lenders and lower borrowing costs for borrowers. This incentivizes higher deposit and borrowing activity, thus improving market liquidity. COMP tokens are distributed for free to users who interact with the Compound protocol via lending and borrowing — the larger the transaction, the more COMP is earned. This process is known as "liquidity mining."
4,229,949 COMP tokens are stored in a "Reservoir" smart contract, which releases 0.5 COMP per Ethereum block (about 2,880 COMP per day), meaning the entire distribution will take about four years.
COMP is distributed across all lending markets (ETH, USDC, DAI, etc.) in proportion to the interest generated by each market — meaning the allocation rates vary dynamically.
In each market, 50% of the COMP goes to suppliers and 50% to borrowers. Users earn COMP based on their share in the market.
Once an address accrues 0.001 COMP, any transaction within Compound will trigger a transfer of the earned COMP to their address. For smaller amounts, users can manually claim their COMP.
Compound involves four main participants: lenders, borrowers, liquidators, and Compound itself.
Lenders deposit eligible assets into the Compound smart contract. Currently, Compound supports 11 token pools (BAT, DAI, SAI, ETH, REP, USDC, WBTC, UNI, COMP, ZRX, and Tether/USDT). New assets can be added through governance voting.
After depositing, lenders receive cTokens (e.g., cBAT, cDAI), representing their claim on the underlying assets and interest.
Lenders can also become borrowers. Borrowers must maintain a collateral ratio below 1, meaning borrowed value must be less than the collateral’s current market value.
Borrowers pay interest on loans, which constitutes Compound’s revenue. If a borrower's collateral drops below the safe ratio due to asset depreciation or loan appreciation, liquidators can repay the debt and seize the collateral at a discount. Once liquidated, the corresponding cTokens become void.
Compound uses a “collateral factor” to define how much of another asset can be borrowed per unit of collateral. Most DeFi lending platforms use over-collateralization, often requiring a 150% collateral ratio. If the value drops below this, liquidation is triggered, allowing liquidators to buy the collateral (e.g., ETH) at a 3%-5% discount.
COMP is the governance token of Compound, representing voting rights. Community members can submit and vote on proposals to change the protocol. Of the 4.23 million COMP allocated for liquidity mining, 50% goes to lenders and 50% to borrowers, proportionally distributed based on market participation.
Total fixed supply. Starting June 16, 42.3% of COMP is released via Ethereum blocks at 0.5 COMP per block, totaling 845,989 COMP per year for 4 years.
23.96% has been distributed to Compound Labs shareholders
22.26% will be allocated to founders and team members over 4 years
3.73% is reserved for future team members
50.05% is reserved for protocol users (of which 42.3% is actively distributed)
On September 3, 2019, security firm Zeppelin completed an audit of the Compound protocol.
Liquidity mining is an effective incentive and token distribution mechanism, but it only works well if the underlying project has real utility. Compound would remain functional even without the COMP token. As a part of the broader DeFi economy — which continues the decentralization ideals of Bitcoin — Compound represents an early but important innovation.
Network congestion on Ethereum could block liquidations during market crashes. Other risks include smart contract vulnerabilities and security attacks.
Currently, the COMP token only provides governance rights and not profit-sharing. Compound users pay two types of costs: gas fees for transactions and an interest rate spread between deposits and loans. Some portion of the profits from this spread may support the platform’s operation, but the whitepaper does not specify whether it benefits COMP holders. In earlier versions, these profits were allocated to the Compound operations team.
The Compound to other currencies exchange rate?
