Compound : Autonomous Interest Rate DeFi Protocol – Overview
Compound is a blockchain-based decentralized protocol that allows you to lend and borrow cryptocurrencies and it is an algorithmic money market protocol, Compound uses smart contracts to automate and manage the capital being added to the platform. Any users around the world can earn interest by connecting web 3.0 wallet like Metamask, Compound is a permissionless protocol that is anyone with a crypto wallet can interact easily with this protocol. it is mainly used by yield farmers to borrow assets and supply to other DeFi protocols.
How Does Compound Protocol Works?
Compound works with over-collateralization which means borrowers have to supply more value to avoid liquidation and it decides how much you are allowed to borrow based on the quality of assets. Compound supports a specific set of cryptocurrencies such as DAI, ETH, USDC, ZRX, USDT, So it is easy for everyone can be participated in this protocol around the world to lend and borrow crypto immediately without having the cost of dealing with a traditional financial intermediary
Benefits of Compound:
The main value of the premise for Compound is it to allow users to earn a yield on their crypto assets without the involvement of an intermediary
Currently, the total supply of COMP is 10 million, Users can earn 42.3% from that supply when they regularly use Compound protocol.
In the Compound protocol, users can check their amount of interest paid per day on the user distribution page.
By voting a various governance proposals COMP holders can earn more COMP tokens
COMP Tokens are also called cTokens, if the user can locking up USDC in the protocol it generates to cUSDC which means you can automatically earn interest within the protocol.
Compound is like investing your money in a savings account, this is better than depositing your money into the bank.
Where to Create a Decentralized Protocol like Compound?
Most of the business peoples are starting to utilize the DeFi in their business, but they didn’t have an idea to develop a decentralized protocol like Compound and they also need a Decentralized Finance Development Company to develop this kind of protocols, there is an huge demand for creating a decentralized protocol, among them Developcoins build your DeFi based projects with an advanced decentralized ecosystem with Skilled DeFi Developers
Being a Pre-eminent DeFi Development Company, Developcoins helps to develop your own decentralized protocol like Compound and also became expertise in DeFi lending and borrowing development which helps us to provide the lending protocols with innovative features!
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