Want to jump straight to how to buy Compound? You can buy COMP on Coinbase.
Compound is an Ethereum-based project focused on peer-to-peer lending solutions via decentralized finance applications. Users can deposit cryptocurrency into lending pools for borrowers to access. Lenders earn interest on their deposited assets. As a growing initiative in the decentralized finance (DeFi) space, investing in Compound's token, COMP, provides investors with early governance rights on the network.
Looking to add Compound (COMP) to your portfolio? Our guide simplifies the process of buying Compound, ensuring you make informed decisions in your investment journey.
How to Buy Compound (COMP)
Ready to invest in Compound? Follow these simple steps to get started.
1. Sign Up for an Account
Before you can invest in Compound, you’ll typically want to open an account with a cryptocurrency exchange or broker that supports COMP trading. Go to the website or download the mobile app of your chosen platform. You must provide an email address and password. In the United States, regulations require cryptocurrency exchanges to verify user identities before trading. This process typically involves submitting your address, Social Security number and a photo of your driver’s license or another valid ID. After you submit the required documents, the platform will review your account. Once verification is complete, you will be able to start trading.
2. Fund Your Account
You will need to fund your account before you can start buying your desired crypto. Most trading platforms offer various payment methods, including bank transfers, credit cards, debit cards and crypto deposits from external exchanges or wallets.
Choose your preferred payment method. Carefully follow the platform's instructions for the deposit process. Enter the desired amount and review any transaction fees before completing the transaction. Be aware that fees may vary based on your selected payment method and the platform's policies.
3. Purchase Compound (COMP)
After your account has been set up and funded, go to the trade section of the platform. Search for Compound or COMP and place a buy order depending on your desired amount. Make sure to review all the details before finalizing your transaction.
Brief History of Compound
When most people think of cryptocurrencies like Bitcoin, their minds immediately go to anonymous payment methods. For example, you can send Bitcoin to your friend using the Bitcoin network instead of a centralized payment system. However, financial institutions do much more than only facilitate payments between two parties — they also provide checking and savings account services, loans and more.
The decentralized finance (DeFi) sphere intends to use blockchain technology and the Ethereum network to provide a full range of decentralized services that would typically be provided by a bank or other central service. Compound is a lending platform built on the Ethereum network that provides peer-to-peer cryptocurrency loan services. Compound users can lock in collateral and provide loans to other users in exchange for a predetermined interest rate based on market demand. The Compound token (COMP) acts as a governance token that provides owners with voting rights. COMP is an ERC-20 token, and is currently the 138th largest cryptocurrency project when measured by total market capitalization. The token is trading for around $42.84 and has market capitalization of over $376 million.
Where to Buy Compound (COMP)
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How to Store Compound (COMP) Safely
After you complete your first cryptocurrency purchase, it’s a good idea to transfer your coins or tokens to a wallet. A cryptocurrency wallet is a device or program that provides you with a private address that you can use to store your investments off-exchange. This helps limit your liability in the event of a hack or security breach. There are two types of crypto wallets that you can choose from: hardware wallets and software wallets. Consider our top choices for the best wallet to store your COMP tokens.
- Best hardware wallet: SecuX W20 Hardware Wallet
The SecuX W20 hardware wallet is an all-inclusive, secure option that you can use to store a wide range of cryptocurrencies. From Bitcoin to Litecoin and from Ethereum to any ERC-20 token, the cryptocurrency wallet supports all major investments with military grade security elements. The W20’s full touch screen allows you to view your cryptocurrency investments anywhere without connecting to an unsecure internet connection, and a beginner-friendly setup means that it’s ideal for those investing in their first wallet.
- Best software wallet: MyEtherWallet
The original wallet created for Ethereum, MyEtherWallet has expanded to support all ERC-20 tokens. MyEtherWallet is a desktop and mobile application that’s compatible with almost any device. To connect to the desktop version, use its app to scan a custom QR code. This creates a local connection that allows you to access your tokens securely. If you move too far away from the desktop, MyEtherWallet will automatically disconnect from your wallet to ensure that no one else can access or view your tokens when you aren’t nearby. With a quick setup and a wealth of unique tech features, MyEtherWallet is the ideal software wallet for new investors and professionals alike.
Trade or Sell Your Cryptocurrency
If you do decide to hold onto your Compound governance tokens in the long-term, you’ll want to transfer your investment to your cryptocurrency wallet as soon as possible to prevent the possibility of a hack. Both software and hardware options will allow you to track the value of your Compound investment over time, and you can transfer your tokens back to your exchange wallet when you decide to take profits.
You can also earn a return on your investment by capitalizing on short-term price movements within the crypto market. Cryptocurrencies like Compound show a higher level of volatility when compared to assets like blue cap stocks and bonds, which means that you can buy and sell your investment when it's advantageous to you.
Current Crypto Prices
The cryptocurrency market is fast-paced, and the value of your Compound tokens can change on a minute-to-minute basis. Understanding how the cryptocurrency market is changing today can help you plan your trading strategy. Browse a few of the market’s biggest movers today using the chart below.
Adding COMP to Your Crypto Portfolio
Compound can make an excellent addition to any cryptocurrency portfolio, especially if you intend to hold the governance token for a long period and use your voting rights. Before you invest in Compound, you might want to stake another cryptocurrency using the application to get a feel for current interest rates and compatible tokens. This will allow you to learn more about Compound while also earning interest on your cryptocurrency investment.
Frequently Asked Questions
Who owns Compound?
Compound (COMP) is governed by a decentralized community of stakeholders rather than a single entity, allowing COMP token holders to propose and vote on changes to the protocol. This governance model promotes decentralization and aligns the interests of users, investors, and developers, with ownership distributed among COMP token holders, making it a community-driven project in the decentralized finance (DeFi) sector.
Is Compound a good coin to buy?
Whether Compound is a good investment depends on market conditions, DeFi trends, and personal investment goals. As a governance token for the Compound protocol, its value is linked to the platform’s popularity and growth in lending and borrowing cryptocurrencies. Investors should consider market volatility, competition, and regulatory factors before investing in Compound or any cryptocurrency, and thorough research is essential.
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About Sarah Horvath
Sarah Horvath is a prominent freelance senior copywriter renowned for her expertise in cryptocurrency. As one of the leading voices in the industry, Sarah’s insightful analysis and comprehensive understanding of cryptocurrency trends have made her a sought-after contributor to major finance sites. With a focus on providing clear, accessible information, Sarah empowers readers to navigate the complex world of cryptocurrency with confidence. Her dedication to delivering high-quality content has established her as a trusted source for cryptocurrency enthusiasts seeking valuable insights and guidance.