Compound

Compound is a decentralized finance money markets protocol that was originally founded in 2017 with upgrades that followed: Compound v2 and lastly v3 in August 2022.

While Compound v2 supports a wider range of possible collateral assets (ETH, DAI, BAT, ZRX, USDC, WBTC, LINK, UNI, COMP, MKR, SUSHI, AAVE and YFI) and a wider range of debt assets (DAI, ETH, BAT ZRX, USDC, WBTC, USDT, TUSD, LINK, USDP, UNI, COMP, MKR, SUSHI, AAVE and YFI) in comparison to Compound V3 that is focused on capital efficiency and risk-reduction with the feature of single borrowable assets.

Compound V3 is split into two groups:

• USDC (collateral assets supported: ETH, COMP, WBTC, UNI and LINK)

• ETH (collateral assets supported: cbETh, wstETH and rETH)

In Compound, when you supply collateral, it remains your property. It can never be withdrawn by other users (except during liquidation).

In 2020 Compound introduced its native governance token, COMP, which allowed users to participate in the protocol's decision-making processes. The COMP distribution contributed to the growth of Compound as a protocol in the defi ecosystem, and it’s also considered as the “yield farming” pioneer in defi.

COMP is also distributed as rewards to users who interact with the protocol by lending or borrowing.