Compound Protocol Moves Towards Decentralization With COMP Governance Token Launch

  • Compound users will now wield the power to propose and vote for changes to be implemented on the platform. This aligns with their objective of being truly decentralized.
  • With just 1% backing the proposal users will have to determine by voting whether the change is in their interests.

Compound is setting its project to a decentralized governance system as it experiments with a testnet launched on Wednesday. The Open Finance backed startup is looking to grant its users the power to propose and vote for implementations to occur on the platform without requiring permissions from the compound team. A tokenization process will be launched developing the Compound governance token, COMP, to carry out the voting process.

This is in line with the pressure from the community to work on decentralized systems more than centralized chains, explained by Compound founder, Robert Leshner, who used the Bitcoin analogy. He said,

“My personal belief is that nobody would use bitcoin if it was run by the ‘Bitcoin Corporation.”

Compound an algorithmic, autonomous interest rate protocol built for developers, has been at the top of the industry and accounts for up to 15% of total $1 billion in funds locked in Ethereum DeFi. They are currently supporting lending options such as BTC, ETH, and ZRX.

Tokenization not aimed at raising funds

The Compound team is looking at various ways it can tokenize the platform. Leshner was however quick in dispelling any notion that the tokenization was aimed at raising funds. The COMP token won’t be available to the public until complete decentralization has occurred.

Employees, investors, and Compound’s top brass will be issued with the tokens first. Later on, another share of the tokens will be issued on Ethereum with criteria that hasn't been defined by Compound yet.

Implementation Process

Notably, users will be able to propose updates. They will, however, need 1% of the total COMP tokens (set at 1% to help battle spam) to propose an update.

Once a proposal has been made, there is a 3 day voting period. As long as you have the power to do so, you can vote FOR or AGAINST it. A proposal will need to reach quorum (4%) in order to take effect. Once a quorum is reached, the proposal put into TimeLock and will be implemented 2 days later.

At the end of 2019, the Compound Finance team raised over $25 million USD in a funding round including Andreessen Horowitz’s subsidiary, az16, Polychain Capital, Paradigm and Bain Capital Ventures to integrate crypto exchanges, lenders and users on a singular platform.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Lujan Odera
Lujan Odera
Lujan is a blockchain technology and cryptocurrency author and editor. He has worked in the field of cryptocurrencies and blockchain technology since 2015 helping him gain enough experience to be the writer he is today. He is known for his simple writing style that allows novices to understand the field in the simplest way.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Bitcoin to Follow the Equities Market Up or Down? One-Month Correlation Spikes to an All-Time High

Yet another week of weak price movement. The world’s leading digital asset is trading at $9,072, in red with 24 hours ‘real’ volume of just...

Public Mint Launches Its Blockchain; Over 200 Banks Plan to Support Its Digital Money

vPublic Mint, a firm founded by CNET founder Halsey Minor, has announced the launching of its ‘fiat-native’ public blockchain, which enables anyone to easily...

BTC Halving Week Brings in Record Monthly New Accounts & Doubles the Revenue for BlockFi

The past two months have been incredibly dull for the price of bitcoin, but it didn’t affect the businesses in the cryptocurrency space. The...

Currencycloud Partners with Ripple to Leverage RippleNet for Efficient Cross-Border Payments

Currencycloud - one of the global payment processing giants - has become the latest member of the RippleNet family and would help ripple in...

Coinbase Custody and IOHK Partner to Provide Institutional-Grade Staking For Cardano's ADA in Q4

IOHK, the lead developer of Cardano blockchain, and Coinbase Custody, the institutional-grade custodian launched by Coinbase Inc., announced a partnership to allow users to...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today