Compound is a decentralized algorithmic money market protocol running on the Ethereum blockchain that uses lending pools to facilitate loans in a variety of cryptocurrencies. Borrowers can take out collateralized loans, while lenders that make funds available to the lending pools can earn income on their deposits via specially-issued native tokens.
Put simply, Compound allows users to deposit cryptocurrency into lending pools for access by borrowers. Lenders then earn interest on the assets they deposit.
Once a deposit is made, Compound awards a new cryptocurrency called a cToken (which represents the deposit) to the lender. Examples of cTokens include cETH, cBAT and cDAI.
Each cToken can be transferred or traded without restriction, but it is only redeemable for the cryptocurrency initially locked in the protocol. This entire process is automatic and handled by the Compound code, meaning lenders can withdraw deposits at any time.
To incentivize this activity, Compound uses another cryptocurrency native to its service, called COMP. Every time a user interacts with a Compound market (by borrowing, withdrawing or repaying the asset), they are rewarded with additional COMP tokens.
While complex, the model has so far proved adept at attracting users and encouraging other DeFi cryptocurrencies to adopt its model.
Lending tokens on Compound are a great way to have your crypto holdings acquire compounding interest over time. Compound currently hosts 14 pools of different cryptocurrencies like Ethereum, Uniswap and also stablecoins like DAI. Each of these pools has different lending and borrowing interest rates which are the same for everyone independently of how many tokens they supply or borrow. You can hold your position within a pool for as long as you want and freely withdraw your funds as you please.
What you'll learn 👉
Essential tools you need to succeed in crypto
Wallets
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Compound Price Prediction For The Next 90 Days
Following the landmark approvals of Bitcoin ETFs earlier this year, there has been a surge in interest from both retail and institutional investors. This could be a game-change for crypto. With the regulatory landscape beginning to stabilize and provide clearer guidelines, the cryptocurrency market is poised for a transformative finish of the year. At least this is what crypto traders hope for. Bitcoin ETF approvals were done in early January, setting a positive tone for the market. Now, attention is turning towards post-halving rallies, with the BTC halving and ETH ETFs now well behind us. Ripple was also fined to pay $125 million to SEC based on the most recent ruling decision. This is considered as another victory for XRP. Bitcoin has almost tripled in price since last summer, with the upcoming US elections expected to further boost Bitcoin, Ethereum, and the broader crypto market. Bitcoin is trading around $60-63k now, after it hit a new ATH of $73k in March. Ethereum also had its own ETFs approved by SEC. The ETH price is currently around $2,400 and still has not broken its ATH from the 2021 bull run. Investors are hopeful this will happen soon. The majority of investors, traders, and crypto influencers are hopeful that the real crypto bull run will finally commence, bolstered by the recent ETF approvals and historical post-halving rallies. Some of the hottest sectors so far this year were memes, RWA and AI projects.
Below is a tabular overview of how will COMP develop in the short-term (for the next 90 days), according to our prediction model:
COMP Price Prediction 2024
Our prediction model sees a temporary switch to a bear market at the beginning of 2023 before we move onto another leg up in Q3 & Q4 of 2023.
Compound Price Prediction 2025 – 2030 – 2040
Our prediction model sees COMP reaching new highs in 2025:
$499.74COMP price in 2030 & 2040 should be a couple of orders of magnitude higher than our 2025 prediction.
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