What is Compound? The Pioneer of the New DeFi Lending Model
Compound was launched in August 2017 on the Ethereum blockchain and is an innovative decentralized lending protocol. Unlike traditional banking intermediaries, Compound automates processes through smart contracts, allowing asset providers to deposit cryptocurrencies into liquidity pools, while borrowers pay interest to obtain the funds they need.
Compared to centralized finance (CeFi) banking models, Compound offers several advantages as a DeFi application: fully automated execution, high transparency, relatively relaxed regulation, and users retain control over their assets. This decentralized design makes Compound a key infrastructure within the DeFi ecosystem.
COMP Governance Token: Incentive Mechanisms and Token Distribution
To attract more participants, Compound launched "Borrowing" in 2020.