Compound is simply a (crypto) peer-to-peer lending and borrowing platform that anonymously connects lenders and borrowers.
✅ Active community
✅ Active team
✅ Billions $$ of liquidity
✅ Decentralized, DAO.
👉 Compound website.
👉 Compound twitter.
👉 COMP token.
👉 Compound Founder
👉 Compound Docs
Why Lend My Crypto? 🤔
- Earn passive interest on autopilot.
- Make your crypto holdings earn you money, instead of collecting dust.
- Use your deposits as collateral to borrow against them, permissionless-ly.
Why Borrow Crypto? 🤔
- Use your crypto holdings to leverage more buying power.
- Your collateral earns interest while you borrow other crypto!
- Lock-in low borrowing APR rates.
How Does It Work?
- Each asset has 2 sides: borrowers and lenders.
- Lenders deposit the asset into one big pool.
- Borrowers can take loans from this pool.
- Borrowers are OVER-collateralized, so they can't run off with money.
- Interest rates on deposits are determined by borrow demand.
- Compound connects lenders and borrowers, anonymously.
What Is The COMP Token Used For?
- Voting power in the COMP governance.
- Staking it for ~6% APY in the safety module
- The safety module used to cover lost funds via explots, bugs...
- Can be used as collateral on AAVE, to borrow against.
What Are The Risks Of Using Compound?
- Bugs, exploits are always possible.
- Liquidation of your collateral can happen if you take riskier loans and don't actively manage your loans.
- Rewards program for both borrowers and lenders.
- Borrowers and lenders earn COMP tokens on top of their interest APY.
- Lenders also earn COMP tokens for taking out loans!