#COMP What is Compound \(COMP\)?

Compound is a DeFi lending protocol that allows users to earn interest on their cryptocurrencies by depositing them into one of the various pools compatible with the platform.

When a user deposits tokens into a Compound pool, they receive cTokens in return. These cTokens represent the individual's stake in the pool, and can be used to redeem the underlying cryptocurrency initially deposited in the common fund at any time. For example, by depositing ETH into a common fund, you will receive CETH in return. Over time, the exchange rate of these cTokens to the underlying assets increases, which means you can redeem them for more underlying assets than you initially put in; this is how interest is distributed.