What is Compound? How to use Compound Defi?
What is Compound and how to start using Compound? The ComPound Agreement provides a free access to basic financial services for anyone, including loan interest and its loan services. Some people emphasize that Compound is one of the beginning links of decentralized finance. Over the years, Compound has become one of the excellent DEFI agreements, and it is still a huge service project, which locks billions of funds.
What is Compound?
Compound is a decentralized software protocol operating on the Ethereum network, and is committed to encouraging distributed system networks to operate traditional financial markets.
As one of the new type of decentralized finance (DEFI) agreement, Compound applies a variety of encrypted assets to ensure this service project, and you can realize the required loans without financing intermediaries such as banks.
In simple terms, Compound allows customers to deposit cryptocurrencies into the borrowing pool for lenders to browse. Subsequently, the lenders obtained the loan interest from the property they deposited.
After saving savings, Compound will be awarded a new cryptocurrency called CTOKEN (meaning savings) from the lender. CTOKEN instances include CETH, CBAT, and CDAI.
Each CTOKEN can be sold or traded without restrictions, but can also be exchanged for cryptocurrencies that were initially locked in the agreement. The whole process is automatic, which is resolved by compound coding, which means that the lenders can get savings at any time.
Once the client deposits his cryptocurrency to borrow money, Compound will reward them a new cryptocurrency -called CTOKEN. CTOKEN instances include Ceth, CDAI, and CBAT.
Users can not migrate and pay their CTOKEN, but it can only be exchanged for cryptocurrencies locked in the protocol they represent. The Compound protocol uses an independent blockchain smart contract to operate the entire process, allowing customers to obtain savings at any time they choose.
How does Compound work?
Compound fusion applications that operate on Ethereum on Ethereum and incentive mechanisms charged by cryptocurrencies combine borrowers and lenders.
The two key users of the platform include:
Borrowing the loan -all hopes to borrow cryptocurrencies on Compound to send his currency to the detailed address of Ethereum controlled by Compound to obtain loan interest.
Loan -everything is published on compound by cryptocurrency. They can use compound currencies encouraged to use compound encouragement according to the publishing significance percentage.
Compound rewards the COMP currency from the borrower according to the total number of CTOKEN owned in its money clip. The annual interest rate is that the asset can use the supply. The greater the market liquidity, the lower the annual interest rate.
Users who borrows the property can apply any other cryptocurrencies provided by Compound to carry out borrowings, the total number of mortgages.
The most important thing is that if the net value of the assets raised by the lender increases and it is more and more meaningful than the published collateral, the lender may be settled.
Who is the founder of Compound?
Compound was founded by well -known entrepreneur Geoffreyhayes and Robertory.
In 2018, Compound raised 8.2 million US dollars funds from excellent venture capital companies Andreessenhorowitz and BainCapitalventures.
In the second year, Compound had raised 25 million US dollars from the same investors, and new houses such as Paradigmcapital, a venture capital institution that are related to Coinbase.
Some of the total amount of COMP cryptocurrency supply was first assigned to the company and team investors.
What makes Compound unique?
Compound is also unique in the incentive method of decentralized finance. In addition to the general benefits related to DEFI, customers also receive rewards for participating in COMP currency.
Comp not only gives the customer's satisfaction value, and it is also used as a dynamic password for rectification. This encourages customers to not only participate in the agreement, but also have his currency to facilitate online voting for future management decisions. This management decision -making may affect interest rates and other future income elements.
What gives Compound value?
As mentioned above, one of the meaningful aspects of COMP is also that its holders can conduct online voting for future management decisions that endanger mobile software.
Comp holders can also entrust his voting right to others. This allows the origin of the outside world, that is, not the COMP holder — such as laws and regulations, accounting, or other authoritative experts -when a more sensitive problem occurs, it represents COMP holder online voting.
How is the compound protocol be protected?
Because Compound wants to run the decentralized application software (DAPP) on the Internet, it is mainly protected by Ethereum.
Thanks to the blockchain intelligent contract, Compound can fully play, the contract allows each theme activity that can be available in its agreement independently.
The development direction and goals of Compound can also be guaranteed through the rectification system software provided by its original Ecological Comp currency.
How to use Compound
Compound simplicity makes it the best choice to make money from their encrypted assets. With the user -friendly page, the entire protocol is very similar to plug and play. For some people who have never used past centralized financial application software, Compound is a good novice entry method. Although this is a good starting point for novices, for senior professionals, it is also an empty place, and has been widely audited by wide network security.
How to use Compound? Start with encryption wallet
Although it is not necessarily easier or more secure, the decentralized system software is very simple to select the system software is Metamask.
Ethereum is the most popular cryptocurrency on Metamask, but there are other cryptocurrencies that can be inserted and used with Compound.
At the beginning, you must have capital in a wallet to use it, which may be different because you use your wallet. We will have a guide to how to store the assets on Metamask, which is probably a good beginner guide on the assets on many wallets compatible with Compound.
If you already have a property wallet, go to compound.finance. From here, everyone can click the upper right corner to enter the system software to start using this system software.
After entering, this will explain the directory with the Compound and the wallet file. Everyone can choose you to love a wallet and raise it to the car instrument panel.
How to choose a Compound wallet
The type of COMP wallet you chose is most likely to want to do what it does and how much money you need to store.
Hardware configuration wallet or cold wallet for more secure offline storage and backup data options. Both LEDGER and Trezor are COMP for storage solutions, and Ledger also offers pure natural COMP loans. However, the hardware configuration wallet is likely to involve more learning, and it is still a more expensive choice. Therefore, they are likely to be more suitable to store many comps for more senior customers.
The mobile APP wallet adds another choice, and is free and free of use. They can be downloaded as a smartphone or desktop application, and they can be custody or non -hosted. Using a hosted wallet, the service provider represents your management and backup information on behalf of you. Non -hosting wallet application of your device's security is originally stored. Although it is convenient and fast, they are called not as good as hardware configuration wallet safety factor, which is very likely to be more suitable for a small number of COMP or more novice customers.
Online wallets or Internet technical wallets are also free and conducive to adopted. They can be accessed from different machinery and equipment with browser tools. However, they are called hot wallets, and they are most likely not as good as system configuration or mobile app substation safety factor. Because you are very likely to trust this website to manage your Comp, you have to consider that you have good high -quality record credit content in security and hosting. Therefore, they are more appropriate to have a small credit limit or more senior investors.
How to use Compound borrowing
If you have to use other cryptocurrencies for prospective transactions, Compound allows you to use your assets to do so. You can use all your loan currency to use other loans. If you are a beginner, you can persevere to give loans and profit. However, once you understand the cause and effect of cryptocurrency, some transactions may seduce your loans to get rich profits.
However, you must realize that it means that compound and over -mortgaging are used together, which means that you must use a large amount of property as a mortgage. At the beginning, this was worthless. Why do you invest more than you take?
However, the database encryption world has developed rapidly. You are very likely that you can make money for transactions for transactions, and you can get more profits from the original cost of use. In addition, excess mortgage can protect Internet technology. For example, if the price of cryptocurrencies falls too low, you may be liquidated.
Encryption borrowing in Compound
Compound protocol supports the unique cryptocurrency loan. So far, compound can use the following data information cryptocurrency:
US dollar coin (USDC)
Wrapped BTC (WBTC)
Basic Attention Token (BAT)
Tether USD (USDT)
Those who have such encrypted assets can quickly borrow and raise cryptocurrencies on Compound without the time, money and energy to share with the intermediaries without funds. If you have such cryptocurrencies, then I will store, lock, borrow, or message push all credit quotas in the Compound protocol. When we lock the cryptocurrency in the Compound contract, it is similar to depositing money to the bank account. However, it is not easy for you to send cryptocurrencies to financial companies. Instead, your cryptocurrency enters the Compound wallet. Then, you can get the loan interest rate from your cryptocurrency, as if you are interested in the deposit of you have always deposited at institutional bank accounts.
Who controls the compound protocol?
There is no central organization to control the composite agreement. Compound and decentralized network security protection for COMP loan holders.
How is interest rate set?
The annualized interest rate is closely related to the popularity of each market. This type of annual interest rate will fluctuate in a timely manner in accordance with supply and demand. When liquidity is sufficient, the annualized interest rate is very low. With the increasingly scarce liquidity, the interest rate rises, inspiring a new supply and repayment of loans.
Many factors will be the price of compound, including the introduction and discharge of exchanges, psychological states, technology and stock fundamentals, news reporting cycles, and overall economic ecological environment. Complex (com about COMP) is also immediately hoped to participate in its governance required to participate in the network.
What is compound? How to use compound? Compound (Comp) should attract all those who want to obtain additional benefits by borrowing or funding cryptocurrencies. Users who protocols to the Compound protocol have another compound token. Everyone with COMP tokens can help clarify the future direction of the platform, which is also beneficial to the future development of Compound.