This article is a complete guide on Compound cryptocurrency. Decentralized Finance (DeFi) is growing beyond the unsafe use cases and simple money legos. Compound cryptocurrency seems to be the next sound development in a long roll of money protocols. The question is that is Compound crypto a good investment?. Let’s take a look at it in more detail.
What is a Compound Protocol?
According to its whitepaper, Compound runs on Ethereum that enables users to lend and borrow cryptocurrency. It also allows users to have a right in its governance with its COMP token. The COMP cryptocurrency is the governance token of the protocol. The predefined number is shared with all lenders and borrowers on the Compound protocol regularly. The distribution of COMP occurs every 15 seconds when an Ethereum block is mined. In other words, Compound is a DeFi lending protocol. It enables users to make a profit on their cryptocurrencies by putting them into one of several pools supported by the platform.
At the time of writing this, the Compound price was USD 413.41. The trading volume is $202,207,387 USD. It has a circulating supply of 4,793,679 COMP coins and a maximum supply of 10,000,000 COMP coins.
What Is Compound Cryptocurrency (COMP)?
When a user saves tokens to a Compound pool, they get cTokens in return. Now, these cTokens describe the person’s stake in the pool. Furthermore, it can be utilized to cover the underlying cryptocurrency originally transferred into the pool. For instance, by transferring ETH into a pool, the user will get cETH in return. Over a period, the exchange rate of these cTokens to the underlying asset rises. This implies that users can obtain them for more.
Compound Cryptocurrency: How does it work?
The user who holds at least 1% of the total COMP supply can vote on recommendations to modify the protocol. Every COMP token describes one vote. The proposals are executable code that is directed to a three-day voting phase. In this manner, Compound is a completely self-governed blockchain.
The website further describes that daily, nearly 2,312 COMP is given to users of the protocol. In this, the distribution is allotted to each market (ETH, USDC, DAI…), and is arranged through the governance method by COMP token-holders.
Compound Cryptocurrency: How to Get the COMP Token?
Compound cryptocurrency is available on many major exchanges. When purchasing a cryptocurrency from an exchange, it is always necessary to pick a reliable one. In fact, we recommend using Binance to buy COMP.
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