Get to Know Compound Crypto and Its Advantages

When talking about crypto assets, the first thing that usually comes to mind is Bitcoins. But, there are still some other assets that are better, for example crypto compounds or commonly called COMP.

Introduction to blockchains Ethereum as open source allows many people to freely adapt to create new things, including crypto compounds, which were born from an economist named Robert Lasher.

Get to know Compound Crypto

Compound crypto is a network innovation blockchains ETH which allows users to borrow and lend crypto assets. In practice, Compound users will reserve a certain amount of cryptocurrency as collateral, which is then unlocked using the protocol.

In simple terms, the operation of this crypto protocol is similar to that of a bank. At the bank, you can use deposit services to get annual interest.

Likewise with crypto compounds. This system allows users to store various crypto assets easily and will receive annual interest in the same way.

The difference is that this crypto supports smart contracts which makes the user's crypto asset deposits uncontrollable or the balance taken by someone else, including COMP as a protocol provider. The advantage is that even if the crypto asset is locked, users can still withdraw it at any time.

Technically, users can borrow 50-75 percent of the total crypto assets deposited. This amount will be adjusted to the quality of the assets stored.

As for interest, 10 percent of profits will be set aside and given back to other parties and suppliers. Like Uniswap, COMP also has a token called cToken.

Every time a user deposits their own crypto assets, the system generates a new cToken. For example, Pintu's Friends use ETH as a contract, then you can get ETH in return.

Also read: Alt Coin is Alternative Coin, Here's the Explanation!

Advantages of COMP

Although COMP is not a security (therefore does not grant any rights to the Compound protocol or payment as distribution), it provides democratic control and management of the platform itself.

As a token of governance, any COMP holder with a minimum of 65,000 COMP can have a plan (any change in offering and current performance, financial change, or new project) that goes through a voting process if approved will be made. This governance system gives COMP holders the ability to control their investment and wealth.

COMP also offers the opportunity to increase the wealth of its holders due to its unrivaled nature. Only 10 million COMPs could be made, and more than half of them are already in circulation.

In limited words, the price will increase if the demand increases. Even though the token is a newcomer to the crypto space, its value and ability to generate money has made it one of the best coins on the market. 

This combination is in the top 60 coins on CoinGecko, beating other established coins like ZCash and Yearn. Despite their increasing importance and value, if you are considering investing in crypto compounds, we recommend researching them carefully.

Also read: How Dex Walks in the Crypto World? Here's the Explanation!

COMP is a cryptocurrency, and this asset is known for its volatility. Please do your own research before buying it.