Thursday, October 5, 2023

Compound Generates Crypto Return


Compound is the third company Robert Leshner and his co-founder, whom he teamed up with for 11 years, CTO Geoff Hayes started together.

Before being the founder of Compound, Leshner was in the banking and wealth management business. He is a certified public accountant. He is a true economics geek and got into crypto five years ago.

Compound was born in the middle of the year 2017, and it came out of secrecy in January.

Right now, it has $8.2 million in funds that came from Transmedia Capital, Compound Ventures, Abstract Ventures, and Danhua Capital. It is now building its product and alliances to hire its seven current team members in San Francisco’s Mission area.

Leshner said that they plan to launch with great partners—token partners, hedge funds, and dedicated users. He stated that having hedge funds like Polychain should help it gain its first lenders and borrowers.

Compound allows you to borrow or lend cryptocurrency and earn an interest rate. It seeks to establish a cryptocurrency wealth market by allowing you to gamble and short-sell currencies you anticipate will collapse.

They are looking forward to launching the first five tokens by October.

Here’s how Compound works. It is an immediate market that allows lending on short time horizons. Though it may not a bank, it is centralized. You can directly borrow from the platform instead of your peers, making negotiation impossible. You can loan to earn interest. If you borrow, you must invest 100% of the borrowed amount in a Compound-backed asset.

Compound calculates interest rates based on supply and demand for a certain crypto-asset, then adjusts for market conditions. Compound takes a 10% cut of the interest, and you can withdraw your funds at any time with a 15-second lag. When you borrow, you pay the rate.

Leshner mentioned that the goal is to hand off responsibility when setting interest rates to the community. People will force to be responsible because of the short time horizons. He said that if the interest rate is off, lenders and borrowers will intervene to bring it back on track.

He also thinks that this platform is a game-changer since ninety percent of assets are sitting in people’s cold storage, wallets, or exchanges without using or trading it. Thus, Compound lets people connect with crypto in a whole new way.

Vincent Sanchez
Vincent Sanchez
Vincent Sanchez currently writes articles for Cryptoconstellation. He completed his Msc in finance and had a successful career as an accountant. Vincent enjoys travelling and working out.

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