Compound

Compound is a lending protocol and platform built on Ethereum and launched in September 2018. Users can earn compounding interest on or borrow assets against collateral. Each supported asset is aggregated in its own liquidity pool and interest rates are adjusted automatically based on supply and demand.

Collateral balances are represented by ERC-20 cTokens, which automatically accrue interest and increase in value over time relative to the underlying asset they represent. Users can borrow assets against the value of their cTokens. cTokens are freely transferable and can be used on many other DeFi protocols. cTokens can be redeemed for their underlying collateral at any time.

Compound is governed by COMP, an ERC-20 governance token. COMP holders can propose and vote on protocol changes or delegate their votes to someone else. COMP tokens are awarded pro rata to users of the protocol daily, split equally between borrowers and lenders. A large portion of the COMP token supply was retained by the Compound team, investors, and advisors.

Compound's total value locked (TVL) has quickly grown to nearly $800 million, making it one of the largest DeFi protocols. COMP has a circulating market cap of over $500 million.

Compound has undergone multiple security audits by OpenZeppelin and Trail of Bits. The Compound protocol was formally verified by CertiK and has undergone economic stress testing by Gauntlet. Compound maintains a bug bounty program.