Compound gives you the ability to borrow and lend tokens. In Compound, users contribute to a shared pool of tokens, from which lenders can receive a debt. Lenders can repay the debt at any time, as long as they maintain enough collateral. In case their debt becomes under collateralized, users of the protocol can default the lender’s debt by selling his assets in an auction.
An interest rate of each lending and borrowing is defined by the size of the liquidity pool. There are different rates for borrowing and supplying tokens. These rates fluctuate based on the ratio of borrowed tokens to supplied tokens.
- USD Coin
On May. 16, 2018 , Compound announced that it had raised $8.2 million in seed funding. The financing was led by Bain Capital Ventures, Andreessen Horowitz and Polychain Capital, with participation from Transmedia Capital, Compound Ventures, Abstract Ventures, Danhua Capital and Coinbase.