Compound Finance

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Compound Finance is an Ethereum-based algorithmic lending protocol that enables individuals to make money from cryptocurrency by lending it to their peers without intermediaries.

Establishing money markets – traditionally available only to institutions – on a public blockchain, Compound Finance allows its users to receive passive income from non-yielding digital assets, or borrow cryptocurrencies on favorable terms for further investment or other use.

Instead of matching lenders and borrowers like most p2p lending platforms do, Compound Finance lets users lend to the protocol itself, which aggregates the supply of lent funds. The advantage of this system is that users don’t have to wait to recover their funds from a particular loan, but can withdraw their cryptocurrency at any time.

At the same time, borrowers can borrow digital assets directly from the protocol at a floating interest rate. Importantly, the user has to have enough funds on his or her balance to cover the borrowed amount in advance.

History

  • Compound Finance was founded by Robert Leshner (CEO) and Geoffrey Hayes (CTO) in San Francisco in 2017,
  • In November 2019 Compound Finance raised $25M in series A led by Andreessen Horowitz's a16z crypto fund.
  • As of 06.05.2020, the total supply in the protocol exceeded $116M, with total borrow volume over $19M.

References

1. Official website
2. https://www.mycryptopedia.com/what-is-compound-finance-a-detailed-beginners-guide/
3. https://www.coindesk.com/defi-startup-compound-finance-raises-25-million-series-a-led-by-a16z
4. https://medium.com/compound-finance/the-compound-guide-to-supplying-borrowing-crypto-assets-94821f2950a0