Compound Labs Inc.
| Privately held company | |
| ISIN | 🆔 |
| Industry | Decentralized Finance |
| Founded 📆 | August 2017 |
| Founder 👔 | Robert Leshner, Geoffrey Hayes |
Area served 🗺️ | |
| Members | |
Number of employees | |
| 🌐 Website | https://compound.finance |
| 📇 Address | |
| 📞 telephone | |
Compound Labs Inc. is a privately held company aimed at the decentralized finance sector, founded on August 28, 2017, by Robert Leshner and Geoffrey Hayes. They deployed their first decentralized finance product in September with the advent of the Compound Protocol, aimed at building a new transparent and autonomous money market with Ethereum assets.[1]
History
In September 2018, Compound Labs launched Compound v1, which was intended to replace the order-book design and instead opted to use a pooled liquidity system, and interest rates determined by an algorithm following supply and demand. In this version, only five assets were supported for borrowing and lending – ETH, BAT, DAI, REP and ZRX.[2]
In May 23, 2019, the company launched its successor, Compound v2, which would see the addition of "cTokens." It claimed to enable users to earn interest by holding the cTokens and could be transferred around their respective markets. It also claimed to allow developers to easily build applications atop.[3] In addition, the United States Dollar Coin (USDC) was added to the list of assets available for borrowing or lending.[2]
Compound Protocol
The Compound Protocol is an open-source protocol that uses a pool of assets from Ethereum, algorithms written in Solidity, and the nature of supply and demand. The protocol offers a decentralized means of borrowing Ethereum or tokens without the need of having to trust a central entity, such as an exchange.[4] The interest rate model for both borrowers and lenders is based upon utilization, the reserve factor and the collateral factor, and is programmed at the time of listing or if a proposal wishes to change its properties.
The protocol introduces two ERC20 tokens: cTokens and COMP.
cTokens
cTokens is an ERC20 token issued which wraps around the underlying asset when borrowing or lending, the tokens used for supplying or borrowing are converted into a "cToken" which can be used to gain interest, use as collateral, redeem for the underlying token, repay a borrowed asset, or liquidate a borrowed asset.[5]
COMP
The COMP token is another ERC20 token issued by the Compound Protocol with its main purpose to serve a governance model for the protocol. It enables users to vote (or delegate votes), and/or propose new ideas to the protocol itself.
Initially, COMP was being tested on the Ethereum mainnet with venture capitalists, notable investors, partners, and developers. It was planned to release COMP to anyone, whether by trading or earning it via borrowing or lending from the protocol. On May 27, 2020, it was announced that the Compound Protocol would begin to issue the COMP tokens to enable users who borrow or lend on the network to receive voting rights in an effort to decentralize their governance system.[6] Distribution of the governance tokens to the public began on June 15, 2020 after a proposal on the Compound Protocol. As per the proposal, it would distribute 2,880 COMP/day, distributed to borrowers/lenders equally, proportional to the amount of interest accrued on their respective markets.[7]
Upon COMP's public debut, it rapidly gained value, booking an all-time high of $372.79/COMP, placing the market capitalization just under $1 billion USD at $956.13 million, as per CoinGecko market data. Its price was fueled in part due to cryptocurrency exchange Coinbase announcing it would be listing the COMP token.[8][9]
References
- ↑ "Compound - Overview". Crunchbase. Crunchbase. Retrieved 21 June 2020.
- ↑ 2.0 2.1 Dale, Brady (May 23, 2019). "DeFi Pioneer Compound Partners With Coinbase Wallet, Zerion for V2 Launch". CoinDesk. Unknown parameter
|url-status=ignored (help) - ↑ Leshner, Robert (May 23, 2019). "Compound v2 is Live". Medium. Unknown parameter
|url-status=ignored (help) - ↑ Leshner, Robert (February 2019). "Compound: The Money Market Protocol" (PDF). Whitepaper - Compound: The Money Market Protocol: 8.
- ↑ "Compound cTokens Review". DeFi Rate. June 22, 2020. Unknown parameter
|url-status=ignored (help) - ↑ Leshner, Robert (May 27, 2020). "Expanding Compound Governance". Retrieved 21 June 2020.
- ↑ "Distribute COMP to Users". Compound - Governance. Retrieved 21 June 2020. Unknown parameter
|url-status=ignored (help) - ↑ "Compound (COMP)". CoinGecko. June 22, 2020. Retrieved 22 June 2020. Unknown parameter
|url-status=ignored (help) - ↑ Di Salvo, Mathew (June 21, 2020). "Price of Compound token continues to soar ahead of Coinbase listing". Decrypt. Retrieved 22 June 2020. Unknown parameter
|url-status=ignored (help)
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