What is Compound finance?

What is Compound finance?


The Defi ecosystem provides various lending and burrowing protocol. Among them compound finance is one of the most hottest and popular landing platform in the defi space.

Company based on San Fransisco coumpound finance is  is an Ethereum-based platform that lets users earn interest through lending, or borrow assets against crypto collateral. What compound finance is doing is they match those people who are looking for borrowing with those looking for  supplying in order to earn their interest. Currently it allows landing of 8 different assets such as Ethereum, DAI, USD coin, Augur, SAI, WBTC, BAT, OX.

Coumpund finance is ranked as the as the second biggest  project inside the  Defi ecosystem.

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With total lock value of about 176 million dollar in Defipulse where its value has been double since the distribution of the new COMP token lately. ETH is considered as the lion share of Defi function.There is a total of 400,000  ETH locked up in compound finance smart contract.

What is ctoken

Ctoke  is manily a redemption token used to redeem for actual asset. Each 8 different assets in compound finance has its own ctoken such as cDAI,cBAT,cWBTC etc.

This  token works under a mechanism known as liquidity mining. Here tokens are issued to those who supply liquidity  or borrow funds from the platform. It is so designed to provised incentive by cashing out the token into a real asset with high amount of rate.

Currently each cDAI  worth about 0.02 DAI. So if you lend 1,000 Dai with and exchange rate of 0.02 then you will receive 50,000 cDAI  and when the exchange rate is 0.021 you will received 1050 DAI (50000×0.021) at the time of cashing out

What is Comp token

The newly launched launched compound finance COMP token has  become the largest Defi token by marketcap overtaking Maker(MKR) .COMP tokens  is said to be  used as a voting mechanism . Besides with the launching of  comp token the total value deposited in the platform has grown to over 80 million more the  it was before. Comp token total distribution will be 10 million with 4.3 million being circulated.

How to lend on compound finance

Lending our assets on compound finance is pretty simple

  • Go to the website compound.finance and click on the market place
  • From the market overview check the desire assets accorsing to their interest offers.
  • Select the desire market pair either coinbase pro, kraken, kyber network etc
  • Then click on the app button the top right and connect to  your wallet. Currently you use metamask, ledger and coinbase wallet
  • Select the asset you want to add either DAI, WBTC,TETHER, BAT etc.
  • Enter the amount of asset you want to lend. And click supply button.

Compound finance team member

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Compound’s team is lead by CEO Robert leshner's a Chartered Financial Analyst, former economist, and founder of two software startups. Geofrey Hayes as CTO,  Torrey Atcitty as the lead application, coburn berry as the senior engineer  and many other highly qualified members

Conclusion

 Many reputable  products are relying on Compound’s smart contracts and  is also indergoing number of security audit by many reputable companies. Hence  it is one of the most trusted and reliable lending and borrowing platform in the Defi space.

 

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