Compound is a revolutionary DeFi protocol that runs on the Ethereum blockchain, offering users the opportunity to earn interest by depositing their cryptocurrencies into lending pools. In return for their deposits, users receive cTokens, which can be freely transferred but can only be used for the original cryptocurrency deposited. To incentivize participation, Compound rewards users with COMP coins. Borrowers can take out loans by providing collateral, but there is a risk of liquidation if the borrowed asset surpasses the value of the collateral.
Compound acts as a decentralized financial system, eliminating the need for traditional financial intermediaries like banks. Through Compound, users can lend and borrow a variety of cryptocurrencies within the platform. By depositing cryptocurrencies into Compound, users receive cTokens such as cETH, cBAT, or cDAI, representing their deposits. These cTokens can be traded or transferred but are restricted to the initially deposited cryptocurrency. The process is automated by Compound’s code, allowing for easy withdrawal of deposits at any time.
To encourage engagement, Compound introduced its own native cryptocurrency, COMP coin. Users earn COMP coins by participating in the Compound market, whether by borrowing, repaying, or withdrawing assets. This innovative model has attracted numerous users and inspired similar approaches in the realm of DeFi projects. By 2020, Compound had locked over $500 million worth of assets within its protocol.
The platform connects lenders and borrowers through smart contracts on the Ethereum network. Lenders can earn interest by sending their cryptocurrencies to an Ethereum address controlled by Compound. Borrowers, on the other hand, can provide collateral in the form of cryptocurrency and borrow other supported cryptocurrencies up to a certain percentage of the collateral’s value.
Lenders receive COMP coins based on the amount of cTokens held in their wallets, with interest rates varying depending on the current asset supply. The more liquid a market, the lower the interest rate. This dynamic allows users to borrow any supported cryptocurrency up to the value of the collateral provided.
One crucial aspect of borrowing on Compound is the risk of liquidation. If the borrowed asset’s value exceeds the collateral’s value, the borrower may face liquidation. This mechanism ensures the protocol remains solvent and instills confidence in lenders.
For investors in Turkey looking to buy Compound (COMP), Binance TR is the ideal cryptocurrency exchange. Binance TR enables quick account creation and offers a wide range of cryptocurrencies, including COMP. Follow the steps outlined on Binance TR to purchase COMP with TRY.
Binance TR was officially launched by Binance, the world’s largest cryptocurrency exchange by trading volume, in 2020. The platform caters to cryptocurrency investors in Turkey, providing both fiat-to-crypto and crypto-to-crypto trading services. Users can deposit and withdraw Turkish lira (TRY) through bank channels and trade various cryptocurrencies with TRY pairs on Binance TR.
Binance TR leverages Binance’s cutting-edge technology, robust security measures, and liquidity to offer a seamless trading experience for users in Turkey. With access to market-leading liquidity, advanced security protocols, and a range of trading options, Binance TR ensures a secure and efficient trading environment for cryptocurrency enthusiasts in Turkey.
