About Compound (COMP)
The Compound Protocol is an open-source platform for decentralized lending. The system is built on the Ethereum network and allows participants to lend and borrow various cryptocurrencies. Holders of a supported asset can deposit their token into a Compound smart contract to join a liquidity pool and start earning interest. The interest comes from other users that borrow funds and pay interest for the loans.
The key programmatic function of COMP is governance. Holding COMP allows users to vote in changes to the protocol. Anyone holding COMP is able to submit a proposal to the compound.finance community for a vote. In order to be moved to a vote, and to prevent spam, 1% of COMP holders must support a given change to the protocol, such as a new asset supported, or similar governance change. Anyone holding COMP is eligible to vote on a given proposal over a three-day voting period. If a given governance change is passed, then it will take effect two days later therefore giving anyone with a negatively affected position the time to close out that position.
Compound token (COMP) is the digital asset token used for governance in the Compound network. It is built on Ethereum in accordance with the ERC20 standard for tokens.
Compound can be stored in a crypto wallet and custodian like Gemini.
A total of 10 million COMP tokens were created and distributed as follows:
- 4,229,949 Users of the protocol (over 4-year period)
- 2,396,307 Shareholders of Compound Labs, Inc.
- 2,226,037 Founders & team(4-year vesting)
- 372,707 Future team members
- 775,000 Allocated for the community to advance governance through other means