Compound (COMP), launched in September 2018, is the governance token of the Compound protocol, a decentralized lending and borrowing platform on the Ethereum blockchain. Founded by Compound Labs, it enables users to lend or borrow 20+ cryptocurrencies, algorithmically setting interest rates based on supply and demand. COMP empowers governance, staking, and yield farming, with $3B in total value locked (TVL) across its ecosystem.

Key Features

  • Decentralized Lending: Users deposit assets to earn interest or borrow against collateral, with rates adjusting dynamically.
  • cTokens: Depositors receive cTokens (e.g., cETH, cUSDC) that accrue interest, redeemable anytime.
  • Cross-Chain Support: Operates on Ethereum, with integrations on Arbitrum, Polygon, and Base.
  • Ecosystem: Supports DeFi projects like Curve and Aave, with 130+ exchanges and $37.9M daily volume.

COMP Token

  • Purpose: Used for governance voting, staking rewards, and incentivizing liquidity provision.
  • Supply: Circulating supply of ~9.1 million COMP, with a max supply of 10 million.
  • Contract Address: On Ethereum, COMP’s contract is 0xc00e94cb662c3520282e6f5717214004a7f26888 (addable to MetaMask). CoinGecko CMC.

Who Are the Founders of Compound?

Compound was founded in 2017 by Robert Leshner (CEO) and Geoffrey Hayes (CTO), both former Postmates executives. Backed by a $25M Series A from Andreessen Horowitz (a16z) and Polychain Capital, Compound Labs launched the protocol in 2018 and COMP in 2020, kickstarting the yield farming boom. The CompoundDAO governs upgrades.

What Makes Compound Unique?

Compound pioneered DeFi lending:

  • Algorithmic Rates: Interest rates adjust automatically based on market dynamics, no intermediaries needed.
  • cToken Model: Depositors earn interest via cTokens, which increase in value over time.
  • Liquidation Safety: Overcollateralized loans (50-75% LTV) are liquidated at a 5% discount if undercollateralized, protecting lenders.
  • Governance Incentives: COMP distribution in 2020 boosted TVL to $800M, shaping DeFi’s growth.

COMP Network Upgrades (2025)

  • API3 Oracle Integration (Q2 2025): Adopted API3’s OEV oracles on Mantle, enhancing price accuracy for $3B TVL.
  • Boomerang Incentives (March 2025): Introduced decentralized rewards, increasing lending activity by 15%.
  • Arbitrum Expansion (June 2025): Reduced gas fees by 20% for cToken transactions, boosting adoption.

How Is COMP Secured?

Compound and COMP are secured through:

  • Ethereum PoS: Leverages Ethereum’s Proof-of-Stake for transaction and smart contract security.
  • Smart Contract Audits: Regular audits by firms like Trail of Bits ensure protocol integrity.
  • Collateralization: Enforces overcollateralization, with liquidations protecting pool stability.
  • CompoundDAO: COMP holders vote on upgrades, ensuring decentralized governance.

Conclusion

Compound (COMP) is a cornerstone of DeFi, offering decentralized lending and borrowing with dynamic rates and cToken innovation. With $3B TVL, multichain support, and upgrades like API3 oracles, it drives Web3 adoption.