market #comp
Compound is a DeFi lending protocol that allows users to earn interest on their cryptocurrency by depositing it into one of several pools the platform supports.
When users deposit tokens into the Compound pool, they receive cTokens in return. These CTokens represent an individual's stake in the pool and can be used to get back the underlying cryptocurrency originally deposited into the pool at any time. For example, by depositing ETH into a pool, you will receive cETH in return. Over time, the exchange rate of these cTokens to their underlying assets increases, meaning you can use these cTokens to take back more of the underlying assets you put in initially — this is how the interest is distributed.
On the other hand, borrowers can take secured loans from any Compound pool by depositing collateral. The maximum loan-to-value (LTV) ratio varies based on the collateral asset, but currently ranges from 50 to 75%. The interest rates paid vary according to the assets borrowed and borrowers can face automatic liquidation if their collateral falls below certain maintenance thresholds.
Since Compound's mainnet launch in September 2018, the platform has skyrocketed in popularity, and recently passed over $800 million in total value locked.
The price of $COMP is currently up at 800,000.00
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