Compound (COMP) - an ERC-20 asset that empowers community governance!

in LeoFinancelast year

Hello Friends, Greetings 😊🙏

Today I want to present this great project called: COMPOUND


This project runs on Ethereum Blockchain, is a protocol decentralized finance (DeFi), which aims to create an ecosystem of financing and lending, giving credits to users, and applied interests in those assets that the user is within this ecosystem.

It created a token of governance called COMP. This protocol is capable of operating with Ethereum(ETH), BAT, DAI and Rep. Creating a group of investors and that they can generate these loans and give returns to see both the platform and investors.

All this, is seated on contracts intelligent (smart contracts), executed on Blockchain Ethereum. We can define COMPOUND as a token lending platform whose governance is the COMP, although there are internal gold tokens that allow the operation of this platform.

The beginning of COMPOUND
Compound Labs Inc. The company was founded in 2017 by Robert Leshner and Geoff Hayes, in the city of San Francisco. And his goal was to design a protocol in order to allow financial exchange with cups of interest based on their assets. In the following year he grossed $8 million and managed to put your project on track. And this protocol is finally released to the world on 26 September 2018.

It has evolved and has become one of the biggest decentralized protocols of the crypto world. This protocol is revolutionary, because each of us can deposit and borrow cryptocurrencies, yet as we do this we can earn interest.

Compound is able to establish interest rates, using algorithms giving values in real tempos and additionally offering cups very striking interest to the liquidity providers, all in a fully decentralized system. 2020 is that this protocol has reached capture attention.


Operations of COMPOUND
Similar to a traditional bank operates, you have to make a deposit in one of the cryptocurrencies offered by the platform, and you deposit, this will generate interest. I have to note that the interest generated by Compound are higher than those offered by a traditional bank in a savings account.

Another advantage is that you do not have to go through a process of verification and identification, or you'll have to pay exorbitant commissions, as in many cases with traditional banks. Another advantage is that the whole system is handled by intelligent contracts Blockchain of ethereum.

When we deposit in Compound, the Protocol takes that money and that of many others and places them in intelligent contracts, where that money is borrowed, the person who needs the credit and interests that these loans generate, are used to pay the interests of Deposits made by each one of us.

And something revolutionary, credit does not have time to be canceled, it will depend on the commitment that each of the users has.

Many think, but this protocol can not be deceived, after acquiring a loan, it is not paid. These loans are always made with a guarantee, it is usually 150%.

But what happens, if the value of that cryptocurrency is too low and puts at risk the support to cancel the loan. At that time, the intelligent programmed contracts enter, in such a way that it liquidates the cryptocurrency and the value of the loan is obtained.

An example in this case, Ether can be borrowed, and the DAI (STABECOIN) is as an endorsement (collateral).

The CTOKEN are created by Compound to monitor and control deposits and loans from users, generated on the platform. Within Compound, the CTOKEN are an account unit.

If we decide to inject money, the CTOKEN is generated, for example: if Ether is injected, cether is generated, and so on, each asset has its pair.

And the CTOKEN works under the E-20 standards, which indicates that we can save them in our wallet and be able to exchange them without any problem.

When we invest in CTOKEN, the platform is created in such a way as time passed will always get a profit, it does not matter how much the asset has fluctuated.

Now, in what I have explained, there are two protocols, a so-called Yield Farming, that this protocol is the one that allows for performance when it is deposited or invests on the platform.

And the second protocol is LIQUIDITY MINING, which is when my economic participation generates profits in CTOKEN and these at the same time are minted and distributed among the community.

Compound has become one of the largest DEFI protocols in the world. Something amazing as this platform is a great project that has been generated from the Ethereum blockchain.

It has a lot of similarity with current financial systems, but with the big difference that this is totally decentralized. I think that it will continue to grow over time, it is still a very young project. And I think they have to look for the ways for more people to join this project.

Posted Using LeoFinance Beta


Really interesting. Lending in crypto is something that I still don't understand very well. From your explanation what I get is that you need a guarantee of 150% of what you borrowed, is it right?


Anyone who posts collateral on Compound in the form of a cryptocurrency. They are allowed to borrow cryptocurrencies supported by Compound at a percentage of the posted value. The Percentage may vary according to price and other factors as well. Its more like Lending pools somewhere similar to DeFi pools. !PIZZA


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