The global cryptocurrency market size was valued at $1.49 billion in 2020 and is projected to reach $4.94 billion by 2030. According to the latest estimates, there are more than 17000 cryptocurrency tokens available in the world. An increase in the need for operational efficiency and transparency in financial payment systems, data security, and improved market cap are the major factors that drive the growth of the global cryptocurrency market. The number of altcoins in the market has exploded, and with Ethereum hitting its all-time highs in 2021, the future looks promising as more adoption of blockchain technology takes place.

One such DeFi protocol and altcoin with massive potential is Compound (COMP). Compound is an open-source platform for decentralized lending running on the Ethereum network. It collateralizes crypto assets to provide various financial services and is powered by COMP, its native ERC-20 token.

Check the Compound current price, market cap rank, circulating supply, trading volume, historical prices, etc., along with in-depth information on several of the biggest and fastest-growing cryptocurrencies on CoinStats, one of the best crypto platforms around.

Read on for our ultimate guide on the Compound network and learn how to buy Compound in a few simple steps.

Let’s jump right in!

History of Compound

The Compound protocol is built on the Ethereum network and is powered by COMP, its native token. COMP is an ERC-20 token designed to reward users for their participation and allow its holders to vote on decisions concerning the future of the software.

The Compound (COMP) decentralized finance (DeFi) protocol aims to enable completely decentralized and autonomous borrowing and lending by the use of decentralized applications. It allows users to deposit funds they own into lending pools to earn interest on their deposits when other users borrow them. Once lenders deposit cryptocurrency, Compound awards them a new cToken, i.e., cETH, cDAI, and cBAT, which can then be traded without restriction. However, they are only redeemable for the cryptocurrency locked in the protocol for which it represents.

The Compound protocol runs this entire process through the use of smart contracts, allowing users to withdraw their deposits at any time they choose.

The protocol aims to revolutionize the finance and lending industry by removing the need for any middlemen or financial institutions acting as intermediaries. Compound was the first platform to introduce yield farming to the market in 2020.

The co-founders of Compound (COMP) are veteran entrepreneurs Robert Leshner and Geoffrey Hayes.

What Is Compound

The Compound protocol acts as a lending platform/lending pool that connects lenders with borrowers using a combination of powerful smart contracts on the Ethereum blockchain.

Compound rewards lenders with its ERC-20 COMP tokens based on the amount of cTokens held in their wallets and a pre-determined rate. The more liquidity a particular token has, the lower the interest rate generated. Lenders can also take out a loan in any other cryptocurrency supported by the Compound protocol.

The lending, borrowings, or repayments of debts on the platform are incentivized by rewarding users with the Compound tokens. COMP is also a governance token, and each holder of the Compound (COMP) tokens has voting rights in proportion to their holdings. This empowers the users to participate in the decision-making processes of the platform. 

Compound homepage
Compound homepage

Users can also get their hands on the Compound tokens on various cryptocurrency exchanges. The market for Compound tokens and Compound users has grown by leaps and bounds over the past few years.

COMP tokens have a total supply of 10 million and are available to trade on many decentralized and centralized cryptocurrency exchanges such as Binance Futures, Binance, Coinbase Pro, etc.

According to an analysis by CoinStats, the COMP token has a market cap of 937 million USD, with $142.88 per token at the time of writing. It has a trading volume of around $79 million. The price of COMP token reached an all-time high of $855.2 on the 12th of May 2021, and since then, it has come down by more than 60 percent.

Now, let’s look into ways of buying Compound.

Buy COMP on Binance

One of the easiest ways of buying Comp is on Binance. Binance is among exchanges offering the lowest fees in the industry and high liquidity, allowing you to sell and buy digital assets rapidly to take advantage of market possibilities.

To buy Compound (COMP) on Binance, you need to create a retail investor account on the platform and verify your identity by uploading identity proof documents. Once the retail investor accounts are created and verified, Binance will let you buy Compound (COMP) or any other crypto of your choice either through digital assets or fiat deposits using a credit or debit card and bank transfer.

Compound (COMP) is available on Binance in 3 trading pairs, namely COMP/USDT, COMP/BUSD, COMP/BTC. Therefore,  you will need to first buy Bitcoin, USDT, or BUSD through peer-to-peer trading, a bank transfer, or a credit/debit card to purchase COMP. You could also use the CoinStats app comparison service to select what asset you want to trade COMP against.

Once you have selected the asset you wish to trade COMP against, e.g., USDT (TETHER), the next step is to purchase the required amount of USDT needed for purchasing COMP. After you’ve added USDT(TETHER) to your wallet, go to COMP/USDT trade and buy as many coins as you wish. Once the transaction is completed and your order has been fulfilled, the new coins should be displayed in your wallet.

Binance Comp/USDT trade
Binance COMP/USDT trade

Buy COMP on Coinbase

Coinbase is the largest cryptocurrency exchange in the United States, supporting approximately 100 cryptocurrencies. Coinbase fees, on the other hand, might be perplexing and higher than some of its rivals. While Coinbase’s security features are appealing, cryptocurrency trading is highly volatile, so always evaluate the risk.

This exchange currently allows trading for residents of the United States, except Hawaii.

Here is how to buy COMP on Coinbase:

Create a Coinbase Account

If you don’t have a Coinbase account already, you need first to set up an account and verify your identity. Once your account is verified, you are free to buy COMP and other cryptocurrencies to build your crypto portfolio. 

Once you have created your Coinbase account, the next step is to link a payment method to your account. Choose your favored fiat currency and payment method ranging from credit debit cards to bank or wire transfers, etc., depending on your country. There are no transaction fees on bank transfers; however, you won’t be able to withdraw your funds for 5 days.

Buy Compound (COMP)

After adding funds to your account, click on “Withdraw” and input the amount you want to buy Compound for, then go to “Trade” to choose your market, e.g., if you are buying from the US, select “COMP-USD.” Then input the amount of COMP you want to buy and click on purchase. Your COMP tokens should then be reflected in your Coinbase wallet.

Other Exchanges

In addition to Binance and Coinbase, there are a lot of cryptocurrency exchanges where one can buy, sell, and trade Compound. The steps for buying COMP or other cryptocurrencies on various platforms are very similar to Binance and Coinbase. Most of these exchanges allow for purchasing crypto assets via credit/debit card or a bank transfer. The trading fees on exchanges may vary, so make sure to compare them before deciding where to buy Compound(COMP).

Storage of Compound Tokens

Once you’ve successfully managed to buy COMP, the next question is where you should hold COMP. Most users leave their crypto on the exchanges’ wallets, i.e., Binance’s and Coinbase’s hot wallets. Major exchanges such as Coinbase and Binance keep most of their users’ tokens offline to avoid hacks. However, if you want to put your mind at ease and keep your cryptocurrencies as safely as possible, a hardware wallet is perhaps the best option.

Types of Cryptocurrency Wallets

There are two sorts of wallets: Software Wallets or hot storage wallets (digital) and Cold Storage wallets, also known as Hardware Wallets (physical). Both have their advantages and disadvantages:

Software Wallet: A software wallet, also known as a Hot Wallet, is connected to the internet at all times. Several software wallets are available for free download from the App Store or Google Play. Consider the advantages of the CoinStats Wallet, which lets you buy or track your crypto from a single place.

Although software wallets offer substantial protection, they’re still vulnerable because they offer online storage.

Hardware Wallets: Hardware wallets, also known as Cold Wallets, are a safer alternative. A Hardware wallet is a secure form of storing your private keys offline, thereby reducing the chances of a hack. Remember that recovering your funds might be impossible if you lose your private key.

The most popular hardware wallets are  Ledger Nano X, Ledger Nano S, Trezor Model T, etc.

There is no right or wrong answer when it comes to determining which crypto wallet is ideal for you. The ideal option for you is defined by your typical trading patterns and the level of security in your circumstances.

Disclaimer: The information contained on this website is provided to you solely for informational purposes and do not constitute a recommendation by CoinStats to buy, sell, or hold any security, financial product, or instrument mentioned in the content, nor does it constitute investment advice, financial advice, trading advice, or any other type of advice.

Cryptocurrency is a highly volatile market, do your independent research and only invest what you can afford to lose.  Performance is unpredictable, and the past performance of COMP is no guarantee of future performance.

There is a high risk involved in trading CFDs, stocks, and cryptocurrencies. You should consider your own circumstances and take the time to explore all your options before making any investment.