Compound (COMP) enables users to deposit crypto into pools and earn interest.
Compound (COMP) enables users to deposit crypto into pools and earn interest. Borrowers take secured loans from Compound pools by depositing collateral. If this collateral falls below a threshold, the loan is automatically liquidated.
The protocol distributes 2,312 COMP daily as rewards to active lenders and borrowers. In essence, users tend to accrue COMP tokens as they participate in the lending and borrowing economy of the Compound ecosystem.
Anyone can autonomously create proposals by locking 100 COMP in an address. The proposal can relate to changes in:
- The assets' collateral factor
- Interest rate models
- Addition or removal of markets
- Other parameters used by the Compound protocol
A proposal is considered for voting if the proposer’s address is delegated 65,000 COMP. After a 3-day voting process, proposals with at least 400,000 positive votes are queued for 2 days before being implemented.