Compound
Crypto Overview
Overview
Compound is a decentralized lending protocol that enables users to supply and borrow various cryptocurrencies. COMP is the governance token of the Compound protocol, giving holders voting rights over protocol changes and updates.
Intended Utility
The primary purpose of COMP is to serve as a governance token for the Compound protocol. Token holders can propose and vote on changes to the protocol, including interest rate models, collateral requirements, and other protocol parameters.
Actual Utility
COMP is actively used for its intended governance purpose. According to on-chain data, there is regular participation in governance proposals and voting. The token has maintained consistent development activity and community engagement since its launch in 2020.
Token Distribution
The initial distribution allocated approximately 42% to the team and founders with a 4-year vesting period, 24% to shareholders, and the remaining tokens distributed to users of the protocol through liquidity mining. The vesting schedule helps align long-term interests.
Technology Assessment
The core protocol facilitates lending and borrowing, which inherently involves interest-based transactions (riba). However, the COMP token itself is purely a governance mechanism and does not directly participate in these interest-bearing activities.
Development Activity
Compound maintains active development with regular updates and improvements to the protocol. The project has a strong technical foundation and continues to evolve with market needs.
Crypto Impact
To assign a comfort level investing in Compound from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to Compound.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.