FAQ
Compound is a decentralized lending protocol that enables you to lend and borrow crypto. In V3, lenders have complete ownership of their funds, which is the major difference to V2. This removes the risk of illiquidity and enhances the overall safety of the protocol.
COMP is the governance token for the Compound protocol. By lending certain tokens, you can earn COMP from the protocols as extra rewards on top of base interest. COMP token holders can also propose and vote on changes to the Compound protocol.
Your yield basically includes two parts:
1. Interest paid by the borrowers
2. COMP rewards distributed by protocol
Normally, a higher asset utilization rate can lead to a higher lending APY. COMP rewards are variable for each token based on community governance.
Make sure you approve the protocol's maximum amount of your cToken to redeem your assets successfully.
