Compound launches the money market protocol on Ethereum, allowing loans and loans to the Ethereum blockchain
The San Francisco Compound launched its Ethereum-based loan platform today. The money market protocol allows individuals, institutions and applications to earn interest or borrow cryptographic resources without having to negotiate with a counterparty or a peer.
Compound announced the news in a blog post before today.
The money market protocol it is built on the blockchain of Ethereum. With Compound, each market has a dynamic borrowing rate that fluctuates in real time to the adjustment of market conditions. The compound currently has four different encrypted money markets available, included ETH, BAT, REP and ZRX.
Compound allows users to use their cryptographic properties in new and innovative ways. You can make money when cryptic prices fall, for example, by shortening cryptocurrencies using the Compound protocol.
Of course, it is not necessary to have short tokens on Compound to use the protocol. Compound also allows hodlers to earn money from their encryption. If you want to generate interest from your coins instead of seeing them collect dust in an exchange or portfolio, you can deposit them in Coinbase. Compound has already announced a partnership with 26 hedge funds that plan to trade with Compound, offering liquidity to independent investors who want to be combined with borrowers or lenders.
Compound has released the protocol on Ethereum blockchain only after "significant tests and external audits" led by Trail of Bits and Certora. Tests and audits were held throughout the summer until Compound finally felt comfortable with the launch of the Ethereum protocol at the start of today.
You can view the Compound protocol in this Ethereum address: 0x3FDA67f7583380E67ef93072294a7fAc882FD7E7
Initially, the protocol supports four different markets, including:
- Ether (wrapped by WETH-9)
- 0x Protocol (ZRX)
- Basic Attention Token (BAT)
- Augur (REP)
You can borrow and shorten all four tokens listed above using the Compound protocol today.
"Blockchain assets are new and exciting, but they lack the most fundamental financial infrastructure – efficient interest rates," said Compound founder and CEO Robert Leshner, CFA, in a statement.
"Over time, hundreds of billions of dollars of assets will be tokenised, but the institutions that implement them will require the benefits of traditional financial markets: today's launch is only the first step."
You can download the Compound app and access the protocol today. The Compound app is accessible via a Web3 browser such as Metamask or Coinbase Wallet and an Ethereum address.
After launching the Compound protocol, Compound also released a "transparency dashboard" in which users can view market rates in real time. You can view the transparency dashboard here: https://app.compound.finance/#Markets. Shows current rates for all four encrypted money markets available on the Compound protocol.
Composed is warning users that its protocol is still a "highly experimental technology" and that users should only use the Compound "after reading the source code". However, Compound is usable today for users interested in lending or borrowing money in one of the four monetary markets above.
Composed It is one of the best supported blockchain companies in the industry. At the start of this year, the company made headlines for announcing $ 8 million seed funding in a financing round led by Andreesen Horowitz, Polychain Capital and Bain Capital Ventures. Coinbase Ventures, Transmedia Capital and other big names took part in the round. These institutions were attracted by Compound's promise to create friction-free money markets for cryptographic resources, allowing investors to access loans and loans through efficient and untrustworthy markets.
In addition to attracting large-name investors, Compound has spent the summer adding 26 hedge fund partners who have announced their intention to negotiate with Compound.
The San Francisco-based company will continue to develop the protocol in the coming months. The goal is to create an effective way for users to get a return on their holdings in cryptocurrency. For example, instead of leaving cryptocurrencies in a centralized exchange such as Coinbase or Robinhood, users might choose to leave encryption in Compound to gain interest.
Composed he also announced plans for launch a stablecoin on its protocol.