Launched in 2020, Compound (COMP) is an ERC-20 token designed to facilitate the lending and borrowing of various digital assets through a peer-to-peer (P2P) network, eliminating the need for traditional financial intermediaries.
COMP serves a dual role within the Compound protocol – it acts as a governance token and an incentive mechanism for participants. Compound holders have the right to propose and vote on changes to the protocol, influencing parameters such as interest rates, collateral factors, and other governance decisions.
In terms of its role as an incentive mechanism, COMP is distributed to users who lend or borrow assets on the Compound platform. Lenders earn COMP based on the interest generated by the assets they supply to the protocol, while borrowers receive COMP as a reward for using the platform.
The total supply of COMP is capped at 10 million tokens.
