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Definition: Compound


A blockchain-based borrowing and lending protocol that runs on Ethereum. In Compound, all crypto of the same type is treated as a single pool. When users supply crypto, they are awarded cTokens for the funds they have lent. With hundreds of millions of dollars locked up in smart contracts, Compound is a leading lending protocol in decentralized finance (DeFi). COMP is Compound's governance token, which is distributed to users every day based on their assets, and COMP holders decide the role and future of Compound. See Ethereum, cryptocurrency and DeFi.