What is Compound (COMP)?
Compound (COMP) is an ERC-20 governance token that empowers its community to govern the Compound protocol. Holders of the COMP token, along with their delegates, have the authority to debate, propose, and vote on all proposed changes to the decentralized finance (DeFi) platform. This democratic approach ensures the protocol evolves according to the collective will of its users.
A key feature of the ecosystem is its daily distribution mechanism. Approximately 2,880 COMP tokens are distributed daily to users who interact with the protocol by supplying or borrowing assets. This distribution is allocated to each market—such as ETH, USDC, or DAI—proportional to the interest accrued within that specific market. Furthermore, within each market, 50% of the distributed COMP is allocated to suppliers, while the other 50% goes to borrowers, incentivizing participation from both sides of the lending equation.
COMP Key Market Metrics and Live Data
Staying informed with real-time data is crucial for understanding any digital asset's market position. Here are the essential live metrics for Compound (COMP), providing a snapshot of its current market activity and performance.
- Last Price: $41.88 USD
- 24-Hour Change: -2.68%
- 24-Hour High: $43.40 USD
- 24-Hour Low: $41.55 USD
- 24-Hour Trading Volume: $18.13 Million USD
- Circulating Supply: 2,561,279 COMP
- Total Supply: 10,000,000 COMP
- Market Capitalization: $107.26 Million USD
- All-Time High: $912.09 USD
- All-Time Low: $24.04 USD
- Token Rank: #109 (based on market cap)
- Token Type: Utility Token (Governance)
- Platform: Ethereum (ERC-20)
- Mineable: No
Understanding the Compound Ecosystem
The Compound protocol is a foundational pillar of the DeFi landscape, operating as an algorithmic, autonomous interest rate protocol. It allows users to earn interest on supplied cryptocurrencies or to borrow assets against collateral. The interest rates are algorithmically adjusted based on the supply and demand for each asset, creating a efficient and decentralized money market.
The COMP token is the lifeblood of this system's governance. It moves beyond a simple speculative asset to become a tool for direct community engagement. Ownership of COMP translates to a tangible say in the protocol's future, from adjusting interest rate models to adding support for new crypto assets. This model has been widely adopted and inspired numerous other DeFi projects, cementing Compound's role as an innovator in the space.
For those looking to delve deeper into the mechanics of decentralized finance and governance tokens, a wealth of resources is available. You can explore more DeFi strategies to understand how different protocols interact and create opportunities within the broader ecosystem.
Frequently Asked Questions
What is the main purpose of the COMP token?
The primary purpose of the COMP token is to facilitate community governance of the Compound protocol. It allows holders to vote on proposals that dictate the development and parameters of the platform, making it a truly decentralized and community-driven project.
How can users earn COMP tokens?
Users can earn COMP tokens simply by interacting with the Compound protocol. Whether you are supplying assets to earn interest or borrowing assets, you will receive a share of the daily COMP distribution proportional to your share of the interest accrued in that specific market.
What is the maximum supply of COMP tokens?
The maximum supply of COMP tokens is capped at 10,000,000. The circulating supply is continuously increasing through the daily distribution to users until this maximum supply is reached.
On which blockchain is COMP built?
COMP is an ERC-20 token built on the Ethereum blockchain. This means it is stored in Ethereum-compatible wallets and all governance actions are executed through smart contracts on the Ethereum network.
How does Compound’s governance process work?
Governance proposals can be submitted by any user who delegates enough COMP tokens. These proposals are then voted on by the community of COMP token holders. If a proposal receives enough votes, it is implemented into the protocol after a timelock delay, ensuring security and giving users time to react.
What is the difference between supplying and borrowing on Compound?
Supplying involves depositing crypto assets into a Compound market to earn interest over time. Borrowing allows users to take out loans against their supplied collateral. Both actions contribute to the liquidity of the protocol and reward users with COMP tokens.