The legacy financial system can be rather slow, inefficient, and held back by intermediaries. Compound Labs aims to address said problems by offering solutions that are more efficient, faster and taking the middlemen out of the process.
Launched on September 2018, Compound is a lending platform built on the Ethereum where users can borrow or lend from a pool of assets without needing permission. The interest rates are determined by the algorithm based on the proportion of assets lent out, instead of individuals.
Compound Labs is an open-source software development company building tools, products, and services for the decentralized finance (DeFi) ecosystem.
The Compound Protocol is an Ethereum-based smart contract for borrowing and supplying assets. One of Compound’s few core contracts, CTokens, are self-contained borrowing and lending contracts. Each CToken is assigned an interest rate and risk model, and enabling accounts on the blockchain to mint, redeem, borrow and repay a borrow. CToken is an ERC-20 compliant token where balances represent market ownership.
Compound Governance Token (COMP)
Compound also has a governance called Compound Governance Token (COMP). COMP holders are able to play a part in the governance of the protocol via the governor contract. This token adds some layer of predictability to the protocol. Given the open-source nature of the project, developers are able to build applications to monitor COMP.
As of writing, COMP is valued at over $416 and has increased by 2.38% in the past 24 hours. It has a market cap of over $2 million. COMP reached its ATH price of $854.48 on May 11, 2021.