Summary of useful information on the Compound Governance Token (COMP)
1. What is Compound ?
2. How Compound Protocol works ?
3. Who is behind Compound (Compound Lab) ?
4. What is COMP ?
5. What is COMP Distribution purpose ?
6. How can you obtain COMP ?
1. What is Compound ?
Compound is an autonomous algorithmic interest rate protocol designed for developers to unlock a universe of open financial applications.
The protocol allows anyone to supply or borrow Ethereum tokens through a decentralized market. Suppliers earn interest on the crypto they supply to the protocol and borrowers pay interest to borrow it.
8 assets are available at the writing moment :
DAI ;ETH ;USDC ;USDT ;BAT ;ZRX ;REP ;WBTC.
To see interest rate models and all informations in each market : https://compound.finance/markets
2. How it works ?
Each user can lock Crypto-assets in Compound in exchange of Ctoken. It allow you to claim your crypto-back without risk of borrowers. There are some parameters in the protocol as collateral and reserve factor that made each borrowing position to be backed on other crypto with an automatised liquidation process.
To learn more about Ctokens : https://compound.finance/ctokens
3. Who is behind Compound (Compound Lab) ?
Compound Lab. and a big community on Github and their Discord.
Here some you can see on : https://compound.finance/about
4. What is COMP ?
Compound (COMP) is an ERC-20 asset that strengthens community governance of the Compound protocol; Holders of COMP tokens and their debates, propose, and vote on any changes to the protocol.
By placing COMP directly in the hands of users and applications, an increasingly large ecosystem will be able to upgrade the protocol and be encouraged to collectively manage the protocol in the future with good governance.
To learn more about COMP : https://compound.finance/governance/comp
5. What is COMP Distribution purpose ?
You can vote on any proposal submitted by users with more than 100.000 COMP or delegated vote. Each COMP represent 1 vote you can delegate or be delegated to you.
Users allowed can set all possible proposal to modify protocol ; I am pretty confident that there will be a proposal to distribute yearly reserves of protocol to COMP Holders, like a share-holder.
It's a governance token, so it's quite similar to an action in a corporation.
Sharing that power is making the Protocol really decentralized (Compound lab and fondators still remain half of final COMP), and a really enjoying project of DeFi.
6. How can you obtain COMP ?
1. Exchange
COMP is available on numerous exchange like Uniswap, Poloniex or IDEX. Coinbase Pro and Coinbase also announced they will support COMP in a near future.
2. Protocol User distribution
COMPOUND started distribution of COMP Token governance to all users on the 15th June.
All interest earned and paid in the protocol each ETH block (15 seconds) allow to users 0.5 COMP, so 2,880 a day, and split in half to borrowers and suppliers.
Distribution will end the 15th June of 2024 to reach the maximum amount of 10,000,000 COMP.
You can see in real time how distribution work, and a COMP distribution page was added (https://compound.finance/governance/comp).