COMP is used to vote on protocol upgrades including protocol fees, supported collateral, and interest rate changes.
There is a total supply of 10,000,000 COMP split as follows:
- 42.3% reserved for protocol usage
- 24% to shareholders of Compound Labs, Inc.
- 22.25% to Compound founders & team, subject to 4-year vesting
- 3.72% to future team members.
- 7.75% reserved for future governance participation incentives
As illustrated in the top bullet, COMP can be earned by interacting with Compound Finance.
Every Ethereum block,
0.50 COMP will be distributed across ETH, DAI, USDC, USDT, BAT, REP, WBTC and ZRX markets, proportional to the interest being accrued in the market. Within each market, half of the COMP is allocated to suppliers, and the other half to borrowers.
To stay up with which assets are earning the most COMP per day, visit Compound’s governance dashboard.
How to Farm COMP
COMP is accrued automatically as assets are supplied or borrowed from the protocol. To view how much COMP you’ve farmed (or earned) simply navigate to your voting dashboard. Here, you can Collect COMP for voting.
Note: COMP is automatically collected when assets are withdrawn from the protocol. If you’re looking to save on gas fees, simply withdraw $1 worth of any asset and COMP will be collected automatically!
COMP Crop Rotations
The asset(s) which are earning the most COMP per day is constantly changing. As we mentioned above, those which are collecting the most interest are the ones which earn the most COMP. The best way to stay up to date with this is to keep an eye on Compound lending rates or by viewing the COMP distribution dashboard.
High-Risk COMP Yield Farming
For those looking to maximize their COMP yield farming, Instadapp offers a feature called “Maximize COMP earnings”. Using Flash Loans, users can take out leveraged positions on support Compound assets. Here’s a great explainer video on how to do this:
Please note that this feature is highly risky and can put you at risk of being liquidated. Every asset on Compound has a different Collateral Factor which determines how much of you capital can be used as borrowing leverage.
Seeing as COMP is distributed evenly to borrower sand lenders, my using a Flash Loan to borrow against your supplied capital, users can yield stake the amount of capital they have in Compound to compound (no pun intended) COMP rewards.
February 26th – Compound announces COMP on testnet for early experimentation.
April 16th – Compound replaces admin keys with community governance.
April 21st – Compound begins delegating voting power to key ecosystem actors like DeFi Rate.
May 28th – Compound releases details regarding COMP token distribution.
How to Vote with COMP
Anyone can vote on any Compound proposal directly through the Voting App. To do this, you will need to set up your address for manual voting by selecting Get Started and then Manual Voting.
Once you’ve registered your address for voting, simply click on the proposal and choose Yes or No.
To delegate your voting power, select Delegate Voting, and choose the address you want to assign your voting power to. To select a delegate which meets your sentiment, check out the Governance Leaderboard and enter in their name. The model will automatically populate their address for you.
Please note that voting on a proposal will require you to sign a transaction.
The official address for COMP is 0xc00e94cb662c3520282e6f5717214004a7f26888.
When supplying assets to the protocol, there are far fewer risk of getting liquidated or losing capital.
Using Nexus Mutual, users can purchase smart contract covers that protect them in the event that Compound’s smart contracts are hacked.
No. We expect the return on COMP to decrease in time as more tokens enter circulation. Please note that in order to earn significant returns off of COMP yield farming, you will need to post a significant amount of capital (more than $10k) to earn amounts that are worth your time.
One of the great things about Compound is that tokens can be added and removed at any time. There is no minimum lockup and no minimum capital required to get started.