Compound Finance

Compound is a decentralized money market protocol where users can earn interest by depositing crypto assets into smart contract pools and borrow by posting collateral. The protocol originated on Ethereum, and with its current version, Compound III, it has also opened markets on other networks such as Arbitrum, Base, Optimism and Polygon. COMP is the governance token issued on Ethereum.

Interest rates are not set manually; they change algorithmically through a formula tied to the utilization rate in each market. In Compound III, each market is built around a single borrowable base asset, such as USDC, and other assets are accepted only as collateral; positions whose collateral value becomes insufficient are liquidated. COMP holders can cast their votes themselves or delegate them to another address; collateral parameters, new markets and protocol upgrades are decided through on-chain proposals.

Deposit and borrowing volumes in the protocol, governance decisions, smart contract security and competition with rival lending platforms such as Aave can be decisive for the COMP price. The value shown on Lzzo.com is taken from the COMP/USDT pair on Binance and converted into US dollars at Coinbase Exchange's USDT/USD rate; the chart is based on the same dollar series.