What is Compound.Finance? (in 60 seconds)
Compound is a decentralized finance application (DeFi dApp) that allows users to borrow and lend cryptocurrency. Lenders are rewarded for lending cryptocurrencies like DAI (collateralized stablecoin). Depending on market conditions, the rewards are 3–8% APY (annual interest). Borrowers pay a higher fee to use money from the lenders. This decentralized financial system puts the service in the hands of the user and not a centralized source like Bank of America or Lending Tree.