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What is Compound ?

Compound is an algorithmic collateralized loan protocol. Users can borrow assets with current variable rates or earn interests by supplying assets. The token borrowing rate is determined by the algorithm based on the "supply balance" and "borrow balance". Compound takes 10% from the borrowing rate as platform income and divide the rest to the token suppliers. Token suppliers will receive the cToken as proof of deposit and can become borrowers by borrowing other assets worth 50%-75% of his cTokens balance based on his supplied tokens. Since users can be borrowers and suppliers on Compound at the same time, the net borrowing rate is the difference of his borrowing rate and supplying rate. Anyone can start the liquidation process once the borrower is under-collateralized. Compound offers a 5% discount on the collateralized asset as liquidation incentive to ensure the debt positions are liquidated effectively. Currently, Compound has supported primary ERC-20 tokens, including ETH, DAI, USDC, USDT, WBTC, REP, ZRX, etc. and more will be supported by community COMP (Compound's governance token) holders' votes. Latest [public audit report]( is provided by OpenZeppelin.

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