How to Enter the Decentralized Finance (Defi) Trading Industry with a Compound Clone Platform?

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Coinmonks

6 min readJan 12, 2022

More people require access to financial services across the world. Currently, centralized authorities like banks and governments have full control over the funds of investors. However, Decentralized Finance (DeFi) will change that. These open-source platforms operate on different blockchain networks and are free from the control of intermediaries. Likewise, Compound is a P2P lending platform running on the Ethereum blockchain. Are you that entrepreneur looking to use the potential of Web 3.0? Develop a Compound clone now.

Decoding the importance of a Compound Clone Script

It is an algorithmic interest rate protocol that contains features and functionalities identical to Compound. Investors can use multiple services like treasury management, transfer of assets between different exchanges and digital wallets, staking, and trading. Moreover, they receive voting rights. Thus, retail and institutional traders can participate in the governance of the platform.

What happens in the long run? Traders receive regular returns every year on their balances of US Dollars (USD). Moreover, they can access services offered by crypto exchanges and DeFi platforms. Thus, investors can lend and borrow assets, earn lottery as prizes, manage their portfolios 24x7x365, and safeguard themselves from yields with risk tranching.

The primary features of a Compound Clone Platform

Personalized dashboard — Investors can borrow and lend assets in a quick time by clicking the dashboard. They will receive a list of cryptocurrencies, crypto tokens, stablecoins, and DeFi assets available for borrowing and lending. Besides that, traders get real-time information about the Annual Percentage Rate (Yearly), collateral to be deposited, and liquidity (in million dollars).
Integrated Wallets — Retail and institutional traders can manage their funds efficiently by using both software and hardware wallets. Thus, they can choose online wallets like Coinbase Wallet, MetaMask, and all wallets supported by the WalletConnect open-source protocol. Moreover, investors can safeguard their funds by using offline wallets like Ledger Nano X and Ledger Nano S. Users can access features like cross-chain transfer, Bluetooth integration, staking, lending of crypto tokens and stablecoins, and 12–24 recovery seed phrases.
Vote option — Users can exercise their decision-making rights by pressing the vote option. Thus, they can share their opinions and viewpoints for different proposals that influence the growth and development of the P2P lending platform. Investors can see a list of active and upcoming proposals and take action appropriately. Further, data about the number of votes, vote weight in percentage, and the number of voted proposals are displayed.
Open Price Feed — Investors can access data of popular cryptocurrencies, tokens, DeFi assets, and stablecoins by clicking the open price feed. They get information about the value of tokens and the change in their price over a period. How is the data circulated on a real-time basis? Reporters on blockchain oracles like Chainlink and Decentralized Exchanges (DEXes) like Uniswap sign off-chain data about the prices. As a result, investors who have an Ethereum account will move the data on-chain.
Creation of Treasury Accounts — Investors can receive steady income by using the Treasury option. They will earn interest rates every year depending on the USD Balances. Moreover, retail and institutional traders can deposit, as well as withdraw funds from the Treasury account in a quick time. Are the funds secure? Yes of course! Treasury Accounts assist in converting US Dollars (USD) to USD Coin (USDC). Institutional investors can use options like wire transfers, treasury API’s for direct integration, and report generation.
Market Overview section — Investors can strategically manage their portfolios by checking the market overview dashboard. They receive details about the total supply of digital assets, and the total amount borrowed by investors. Accordingly, small and big traders can choose the right asset after checking information about the number of borrowers and suppliers, the trading volume of crypto tokens, number of delegated votes, voting addresses, and the annual interest rate offered for borrowing and lending assets.
Custodian services — Native tokens are the backbone of a Compound clone platform. For instance, investors can mint cTokens on a peer-to-peer (P2P) lending platform like Compound. They earn interest depending on the exchange rate offered, the value of Ether and Wrapped Ethereum (WETH), the supply of stablecoins. Moreover, investors can also utilize their virtual tokens as collateral. Likewise, a crypto token development company will create virtual assets similar to CErc20 and CEther. Thus, investors can wrap their ERC-20 assets and holdings of Ethereum (ETH).
Multi-layer security measures — Retail and institutional traders can secure their funds from hackers and phishers. A peer-to-peer (P2P) lending platform development company will ensure integrity and transparency with steps like end-to-end encryption (E2E), private keys, and multi-factor authentication (MFA).

The must-know stats about Compound

Since its launch in 2017, Compound has provided consistent yields for investors. For instance, in October 2021, investors received interest rates from around 2.83% and 5.39% for supplying DAI stablecoin.
Its partnership with Coinbase will be a game-changer. Importantly, investors who hold the DAI (Dai) stablecoins on the crypto exchange can deposit them directly on the Compound platform. This will help retail and institutional traders across 70 nations to get yields regularly. Moreover, they get benefits like the absence of trading fees, no lockups of assets, and the creation of accounts in a hassle-free manner.
As per DeFi pulse, a data tracking portal, investors have locked a whopping $8.92 billion on the Compound platform. The numbers are quite encouraging. Depositors have held 2.9 million Ether (ETH) and 206,800 Bitcoin (BTC).
Apart from its numerous decentralized financial services, Compound is focusing more on community governance now. Holders of COMP can vote on all the crucial proposals to the decentralized lending platform.

The cost of creating a Compound Clone Platform depends on

The tech stack used (programming languages, web frameworks, and smart contract testing tools).
Time taken to create the DeFi lending platform on the Ethereum blockchain.
Hourly/Weekly rates paid to the development team.
Post-deployment services like the implementation of marketing campaigns, smart contract auditing, and adding security measures.

Wrapping Up

For the last 4 years, Compound has ignited the Decentralized Finance DeFi) revolution. Anyone can pocket compound interest by contributing funds to the liquidity pool. Are you that entrepreneur aiming to start a blockchain-based lending platform? Reach out to a white-label platform development company for creating a Compound clone soon.

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