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Compound DAO

PreviousAgregator AINextScan explorer

Last updated 6 months ago

Compound DAO Features coming soon!

Compound DAO (Decentralized Autonomous Organization) is a decentralized finance (DeFi) protocol that allows users to earn interest on their cryptocurrencies by lending them out or borrowing assets against their crypto holdings. Here’s an overview of how users can earn with Compound DAO and the mechanisms involved.

How Compound DAO Works?

  1. Supply Assets: Users supply assets (such as ETH, USDC, DAI, etc.) to the Compound protocol. These assets are pooled together and made available for other users to borrow.

  2. Earning Interest: When you supply assets to Compound, you earn interest. The interest rates are algorithmically determined based on the supply and demand for each asset within the protocol. The more an asset is in demand for borrowing, the higher the interest rate for suppliers.

  3. cTokens: When you supply an asset to Compound, you receive cTokens in return. cTokens represent your stake in the liquidity pool and accrue interest over time. For example, if you supply DAI, you will receive cDAI. The value of cTokens increases as you earn interest, which can be redeemed for the underlying asset plus earned interest.

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