Compound (COMP) is a leading algorithmic, autonomous interest rate protocol built for developers to unlock a universe of open financial applications. This article provides a detailed look at its current market data, how the protocol functions, and key information for potential users and investors.
Current Compound (COMP) Market Data
As of the latest update, the live price of Compound (COMP) is $41.7**. The 24-hour trading volume stands at **$25,908,669. The COMP price has decreased by -6.52% in the last 24 hours.
Key market metrics include:
- Circulating Supply: 9,391,300 COMP
- Max Supply: 10,000,000 COMP
- Total Supply: 10,000,000 COMP
- Circulation Rate: 93.91%
- Market Capitalization: $391,613,187
What is the Compound (COMP) Protocol?
Compound is an open-source, autonomous protocol on the Ethereum blockchain that allows users to earn interest on supplied crypto assets or borrow against them. Interest rates are algorithmically determined based on the supply and demand for each asset within its respective liquidity pool. Rates are updated with every new Ethereum block. Loans can be repaid, and locked assets can be withdrawn at any time.
Key Participants in the Compound Ecosystem
The protocol's core functionality revolves around four main participants: lenders, borrowers, liquidators, and the protocol itself.
- Lenders (Suppliers): Users supply eligible assets to Compound's smart contracts. In return, they receive a cToken (e.g., supplying DAI yields cDAI). These cTokens are interest-bearing and represent the user's share in the liquidity pool.
- Borrowers: Users who have supplied assets can borrow other eligible assets against their collateral. The borrowing power is determined by a collateral factor, which dictates how much can be borrowed against each type of supplied asset.
- Liquidators: If a borrower's health factor deteriorates (e.g., their collateral value falls or their borrowed debt rises), their position becomes eligible for liquidation. Liquidators can repay a portion of the outstanding debt in exchange for the borrower's collateral at a discounted rate, helping to keep the protocol solvent.
- The Protocol: The autonomous system of smart contracts that facilitates all interactions and manages the algorithmic setting of interest rates.
The COMP Token and Governance
COMP is the native governance token of the Compound protocol. Its primary purpose is to decentralize control, allowing token holders to debate, propose, and vote on changes to the protocol.
- Governance Rights: COMP holders can vote on proposals or delegate their voting power to others.
- Distribution: A portion of COMP tokens is distributed to both lenders and borrowers on the platform through a "liquidity mining" mechanism, incentivizing participation.
Tokenomics and Distribution
COMP has a fixed maximum supply of 10,000,000 tokens. The distribution is allocated as follows:
- 50.05% to Protocol Users: This portion is distributed to users who interact with the Compound protocol. A significant part of this (42.3%) was distributed via liquidity mining over four years.
- 23.96% to Compound Labs Shareholders: Allocated to the early backers of the project.
- 22.26% to Founders and Team: Vesting over a four-year period.
- 3.73% to Future Team Members: Reserved for future contributors.
Frequently Asked Questions
What was the all-time high for Compound (COMP)?
The all-time high price for Compound (COMP) was $910.46, reached on May 12, 2021. This peak occurred during a period of significant growth and excitement in the decentralized finance (DeFi) sector.
How can I start using the Compound protocol?
To begin earning interest or borrowing assets, you need an Ethereum-compatible wallet like MetaMask. Connect your wallet to the Compound app, and you can then supply supported assets to the protocol. For a more detailed guide, you can 👉 explore comprehensive DeFi strategies.
Is Compound a safe platform to use?
Compound's smart contracts have undergone extensive audits by leading security firms. However, like all DeFi protocols, it is not without risk. These risks include smart contract vulnerabilities, market volatility affecting collateral, and the potential for liquidation if your borrowed position becomes undercollateralized. Always conduct thorough research.
What is the difference between supplying and lending on Compound?
When you supply assets to Compound, you are essentially providing liquidity to a pool. In return, you earn interest and receive cTokens. "Lending" is often used interchangeably with "supplying" in this context. Borrowers then take loans from these pooled funds.
Which assets are supported by Compound?
The protocol supports a variety of assets, which can change based on governance votes. Historically, supported assets have included ETH, DAI, USDC, WBTC, UNI, COMP, and several others. Always check the official Compound app for the current list.
Can I lose money by supplying assets to Compound?
There is no direct risk of loss from market volatility on the assets you supply, as you are earning interest on them. The primary risk for suppliers is the smart contract risk associated with the protocol itself. Borrowers, however, face the risk of liquidation if the value of their collateral drops significantly.
Key Considerations for COMP
Investing in or using COMP and the Compound protocol involves understanding both the potential of decentralized finance and its inherent risks. The volatility of the cryptocurrency market means prices can fluctuate dramatically. It is crucial to do your own research (DYOR), understand the mechanics of lending and borrowing, and only invest what you are willing to lose. For those looking to delve deeper into the data behind such protocols, you can 👉 view real-time analytics tools.