The DeFi ecosystem has been buzzing since Compound launched its COMP governance token distribution. As one of Ethereum's pioneering lending platforms, Compound allows users to collateralize one asset to borrow another while earning COMP tokens for supplying ETH. However, due to COMP's distribution rules, assets like USDT currently offer optimal mining opportunities when deposited.
On June 18, Chain News Research Director Zhixiong Pan joined a live session to demystify Compound's participation methods, distribution strategy, yield mechanisms, and economic model. Below are key insights from the discussion.
How to Participate in "Lending as Mining"?
Q: What’s the most effective way to mine COMP? How are yields calculated?
- Low-risk approach: Deposit stablecoins (e.g., USDT) via wallets like MyKey.
- Advanced strategies: Leverage arbitrage (e.g., collateralize ETH on Maker → borrow DAI → swap to USDT → deposit on Compound). Tools like InstaDapp automate this but amplify risks.
- Current yields (~10% APY) rival traditional理财产品 (wealth management products).
Q: Is there a minimum deposit?
No official threshold, but small deposits (<$500) may yield negligible COMP after covering gas fees.
Q: Will COMP introduce a burn mechanism?
As a community-governed token, COMP’s rules (including burns) can be voted on. The 4-year mining phase is adjustable via proposals.
Q: How does COMP mining differ from other projects?
COMP functions more like a token-distribution perk atop Compound’s core lending business. Users gain voting rights without disrupting platform utility.
COMP Price Dynamics
- Short-term: Price lacks robust support beyond governance rights. Proposals (e.g., dividends/burns) could shift valuations.
- Long-term: Depends on community adoption and protocol upgrades.
User Retention
COMP’s yield farming is both a marketing tool and a mechanism to decentralize governance. While some users may exit when yields normalize, the protocol’s utility (e.g., leveraged borrowing) ensures sustained demand.
Is Collateralized Borrowing a Pseudo-Need?
Q: Why borrow against collateralized assets?
Users collateralize volatile assets (e.g., ETH) to borrow stablecoins (e.g., USDT) for杠杆 (leverage) or liquidity needs.
Q: When does liquidation occur?
If collateral value falls below the borrowed amount, the system triggers automatic清算 (liquidation).
Q: Is there demand for crypto-backed loans?
Yes. Miners and traders use BTC/ETH as collateral to borrow stablecoins for operational costs or arbitrage—akin to traditional asset-backed lending but with higher liquidity.
USDT’s Role
- Currently, USDT can only be supplied (not used as collateral). A提案 (proposal) may change this.
- High USDT yields stem from its liquidity dominance; similar mechanisms could boost other assets.
Risks and Comparisons
Smart Contract Risks
- Primary concern: Code vulnerabilities (despite BSD-licensed audits).
- Secondary risks: Ethereum network congestion delaying liquidations during volatility.
Q: Could COMP go to zero like Fcoin?
Unlikely. Unlike Fcoin’s opaque交易挖矿 (transaction mining), Compound:
- Operates合规 (compliantly).
- Runs on transparent, immutable contracts.
- Offers fee-free deposits (vs. costly trade mining).
Future of Token Distribution
Compound’s model may become a DeFi standard for:
- 合规 (Compliance): Avoiding securities classification.
- 冷启动 (Cold starts): Bootstrapping liquidity/governance.
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FAQ
1. How does COMP distribution work?
COMP is allocated proportionally to lenders/borrowers based on asset-specific interest rates.
2. Can I mine COMP without borrowing?
Yes. Supplying assets alone earns COMP, but borrowing amplifies rewards (and risks).
3. What’s the safest way to participate?
Use wallet-integrated pools (e.g., MyKey) to avoid complex transactions.
4. Will COMP’s value drop over time?
Likely, unless governance adds utility (e.g., revenue-sharing).
5. How does Compound differ from MakerDAO?
Both facilitate borrowing, but Compound’s利率 (interest rates) are algorithmically adjusted, while Maker uses投票 (voting).