Since the beginning of this year, the DeFi ecosystem has been seeing ups and downs just like in a roller coaster.
- The black swan event on 12th of March reduced the market value locked in DeFi protocols by 50%
- Hackers stole $25 million worth of assets and returned them all
- Less than three months later, the market value of DeFi has steadily risen to US$1 billion
In this context, projects in the DeFi ecosystem have also begun to seek changes. Compound, currently the largest DeFi lending agreement, began to try to release governance rights to the entire community.
All COMP (Compound governance token) holders can participate in governance through proposals, voting, etc., so that community members can contribute to the development of Compound.
COMP basic information
Compound plans to issue 10 million COMP governance tokens, of which 42% (ie 4.23 million COMP) will be allocated to Compound users; the rest will be allocated to investors, development teams and future uses.
The 4.23 million COMP for users will be distributed free of charge. As long as you use Compound to deposit or borrow, you can get a certain percentage of COMP. The larger the deposit and loan amount, the more COMP you will get.
Specific distribution rules
- 4.23 million COMP are placed in the "reservoir" smart contract, and will be issued at a rate of 0.5 COMP per Ethereum block (about 2880 COMP per day), which means it will take 4 years for all COMP to be distributed;
- COMP will be allocated to each loan market of Compound (ETH, USDC, DAI, etc.), and the ratio will be determined by the interest of each market, which means that the allocation ratio will change at any time;
- In each market, 50% of COMP will be allocated to depositors and 50% of COMP will be allocated to borrowers. Users can obtain a corresponding proportion of COMP according to the proportion of their assets in the market.
COMP distribution mechanism
How to use Compound to get COMP
If you have never used Compound, please take a look at this part;
If you know how to use it, please scroll down directly to "How to Receive COMP".
As mentioned above, as long as you use Compound, you can get COMP. Take the Dai in imToken as an example.
Enter the "Browser" page of imToken wallet, and enter "Compound" in the search box and open it, then open Dai's authorization.
After the authorization is confirmed, click the Dai icon, and then confirm "Enable", and then you can set the number of Dai to be deposited in the Compound. In the example, the "Maximum value" is selected.
Operate from left to right
After depositing Dai, Compound will issue the corresponding amount of cDai to your address at the initial ratio of 1 Dai=50 cDai (cDai can be simply understood as a voucher, if you need to withdraw Dai at that time, the corresponding cDai will be deducted) .
At this time, you can see that the interest continues to increase, and you are also eligible to receive COMP.
Note: If you participate in Compound lending through a third-party application, you may not be eligible to receive COMP at this time. The specific situation needs to be confirmed with the third-party application.
How to receive COMP
After using Compound deposit and loan operations, we can check the number of COMP available on our address and receive it.
Click "Vote" in the upper right corner of Compound, you can see "COMP balance" and "Get COMP"
- COMP balance: the amount of COMP that can be directly managed on the address
- Obtain COMP: The COMP certificate given to you by Compound (change in real time)
There are two ways to convert "obtained COMP" into "COMP balance":
- (Recommended) As long as the number of your balance is greater than 0.001 COMP, subsequent deposit and loan operations on Compound will automatically complete the conversion without additional operations
- Click "Collect" to initiate a specific operation to complete the conversion (need to pay a separate miner fee for the conversion)
After completing the conversion, you can view and manage COMP on the wallet homepage.
Last but not least
If you are a Compound user, this tutorial will give you one more way to get free tokens; if you are a new user, you need to carefully judge whether to participate.
Risk Warning: None of the content in this article constitutes any form of investment advice or recommendation. imToken does not make any guarantees or promises for the third-party services and products mentioned in this article, nor does it assume any responsibility. Digital asset investment has risks. Please carefully evaluate these investment risks and make your own decision after consulting with relevant professionals.