Compound is a project that allows some users to borrow cryptocurrency and others to lend it at interest. The protocol works in a decentralized way, which makes it reliable and independent of anyone. It has its own cryptocurrency COMP, which can be bought through Broex exchanger or at one of the many other exchanges.
The company that developed the Compound protocol was founded in 2017 by two young entrepreneurs, Robert Leshner and Geoffrey Hayes. Both had previously held senior positions at a well-known food delivery company.
The idea for the creation came when they realized that most cryptocurrencies were simply stored on centralized platforms, and were not generating income for their owners. Leshner and Hayes decided to change that, which resulted in Compound.
For the Compound review to be full-fledged, it's important to understand how the protocol is used in practice. Users are divided into 2 groups - lenders and borrowers. Anyone can be one of them. The protocol is decentralized and not regulated by the government. This provides an opportunity to use it even for people from countries where the banking system is almost non-existent.
To become a lender, you need to:
- deposit your cryptocurrency, whether COMP or ETH, into the pool of the protocol;
- get some C-tokens in return, which are a confirmation of the fact that you have a share in the pool;
- when you need to withdraw your funds with interest, exchange the C-tokens back into the invested cryptocurrency.
The price of C-tokens is gradually increasing, so during the reverse exchange, the lender will receive more money than invested.
To become a borrower, you need to:
- put up collateral in any cryptocurrency;
- borrow the necessary assets, with their total value not exceeding 50-70% of the total price of the coins as collateral;
- when the time comes to pay back the debt, transfer the assets borrowed with interest to the protocol;
- take back the collateral.
This makes it possible not to sell your cryptocurrency when some other asset is needed for a while.
Soon after its launch and the publication of many reviews on Compound, the protocol began hitting its stride. Sometimes the total amount of funds blocked by creditors reaches $1 million. The opportunity to earn by simply transferring your cryptocurrency to the pool, as well as the ability to borrow assets against collateral, appealed to participants of the crypto market, and began to be actively used.
The COMP protocol's native cryptocurrency is used for:
- depositing it into the pool for the purpose of earning interest;
- leaving as collateral for further borrowing in other cryptocurrency;
- proposing any changes to the protocol and voting for possible innovations, e.g., connecting new digital assets.
The disadvantages of the protocol include its operation only in the Ethereum network. Therefore, it is only possible to leave as collateral and to borrow assets that work on this blockchain (you can read what a blockchain is by clicking here).
The advantages of Compound are:
- ease of use.
If the price of collateral assets falls and approaches the value of the funds borrowed, they will automatically be sold. Thus, the lenders will not be at a disadvantage, and can be sure that they will make a profit by transferring their funds to the pool.
Compound coins appeared in the open market, where anyone can buy them, in the fall of 2020, as can be seen in the chart. In the first months, the rate of the cryptocurrency COMP was in the range from $90 to $130. It reached its peak in May 2021. At that time, the price of Compound crypto exceeded $850 per coin.
Users who successfully invested in the COMP cryptocurrency could sell it for about 8 times more than they bought it. And even now it is trading at a higher price than a year ago.
In the long term, experts expect the COMP crypto rate to return to $850, and then - growth above $1000 per coin. The price of Compound cryptocurrency will grow if the protocol continues to gain popularity, and that is what experienced participants in the crypto market are expecting so far.
If you decided to buy Compound cryptocurrency as a result of reading this review, we recommend using only reliable, licensed platforms. The first priority when investing somewhere is to make sure that the funds are safe. Making money is secondary.
We offer you Broex exchanger. Using it, you won't have to doubt the fairness of the platform. Broex is officially licensed in Estonia, which means that it has passed all inspections of government agencies.
However, there are other reasons to choose Broex exchanger when you need to buy Compound cryptocurrency:
- Intuitive interface. It doesn't take a long time to figure out how to buy or how to sell digital assets when the rate of COMP cryptocurrency rises. It will only take a few minutes to master the exchanger.
- Technical support working around the clock. You can ask for help even at night or on a day off. Support operators will explain how to make the desired transaction, or solve the technical problem in the shortest time possible.
- Low commissions from 0.1% per transaction. In some scenarios there are no commissions at all.
- Convenience of deposit replenishment. You can deposit any amount starting from 1500 rubles. Balance can be replenished in rubles, dollars, euros - from a bank card or through AdvCash.
- Large selection of digital assets. You can buy not only COMP crypto, but also more than 2,000 other coins at current prices through Broex.
You can use the exchanger not only from your computer, but also with a mobile phone device. For this purpose, Broex app was developed, which can be installed on any smartphone. Thanks to this, you can buy Compound cryptocurrency, or sell when the price reaches the desired level, from anywhere, even if you are on a trip or on a walk.