What is Compound (COMP)? — All about the DeFi Lending provider

Decentralized Finance (DeFi) has become a household name for everyone this year at the latest, thanks to Compound. The lending protocol got off to a flying start with the launch of its own governance token COMP, rising several 100% in a concise period of time to rank #1 among all DeFi tokens.

The dominance of MakerDAO seems to be over for now, but what is actually behind the project? How can you earn money with Compound? How do users achieve returns of 100% and more? What is behind the DeFi app, the COMP token, and the dangers of being aware?

We provide you with answers to the most important questions about the DeFi and Lending Highflyer in our “What is Compound” knowledge article.

What is Compound — explained

The compound is a DeFi protocol that runs on the Ethereum Blockchain using smart contracts. The principle is explained, as the focus of the project is on lending and borrowing cryptocurrencies. Behind it is nothing more than lending and borrowing Ethereum-based tokens (ERC20).

To lend his tokens (Lending / giving loans), the user receives interest and can also earn COMP tokens. Lending (borrowing) cryptos are also rewarded with COMP tokens, but more on that later. The interest rates are variable for both sides…