Yes, earn some compound by just watching the video. So hopefully after this, if you watch the video with me, you already know the answers. So you can just, you know, click the answers real quick without having to watch them again.
The number two borrowing crypto with compound, typically an order to take out a loan. Maya would have to fill out an application with a centralized financial service provider. It’s a long process with a host of requirements and opportunities for bias to avoid this. Myra could borrow crypto assets directly from compound instead using assets. She has supplied to the protocol as collateral and traditional finance. This process of borrowing against supplied assets is called over collateralized lending compound is different from a typical money market though, because it’s decentralized and operates completely autonomously. The only central authority is the code itself with compound Maya or any financial application or service can instantly access borrowed crypto assets and then make use of them. However they see fit. For example, Maya’s goal might be to put an advanced trading strategy into place like leveraging her borrowed crypto to invest in other assets to borrow crypto.
The first thing Maya does is supply an asset to compound supplied assets immediately start generating interest and can also be used as collateral to borrow any other supported asset of Maya’s choice. The more she supplies, the higher her borrowing limit increases to limit risk across the protocol compound gives each asset its own unique collateral factor. This means that each supplied asset will affect the borrowing limit differently. For example, for every $1 of Ethan Maya supplies, she can borrow up to 75 cents worth of USD coin. This is because Edith’s collateral factor is 75%. My earns interest on any assets she supplies even while they are being used as collateral. This helps to lower the cost of borrowing as the net cost of borrow can be seen as the borrow rate minus the interest being earned on supplied assets. The interest rate for each compound market is dynamic and based purely on supply and demand.
These rates determine the interest Maia pays for borrowing and asset and are calculated per block. Just like when earning interest, this has done to ensure the rates always reflect current market conditions over time markets with fewer suppliers and lots of borrowers will become more expensive to borrow from and more rewarding to supply to all markets with lots of suppliers and fewer borrowers or become cheaper to borrow from and less rewarding to supply to. In essence, the more an asset is borrowed. The higher the interest rate will rise and vice versa with compound. Maya can save time and borrow crypto instantly without having to liquidate her other crypto assets, provide her credit score, fill out an application or wait for an underwriter’s decision. Okay. Okay. That was interesting. Boom. Look at that. We just made $3.
All right, hold on. Just the competition compound’s goal is to create a protocol that can run forever and evolve an entirely new ways in order to achieve this goal. The protocol was decentralized by creating and distributing comp compounds, native Ethereum token, all changes to compound originate from comp token holders who can propose and vote on changes to the protocol. Any user or application interacting with compound can earn comp the more crypto assets, a participant supplies or borrows with compound, the more comps they will earn and return similar to how interest is earned with compound comp distribution is calculated dynamically on a per block basis and distributed to suppliers and borrowers in each market with a release of comp. Every compound user will earn a say in the future of the compound protocol without involving the compound team. This has because simply holding comp tokens will allow users to vote on proposed changes and upgrades delegate their vote to a trusted person or group to act on their behalf and submit their own proposals for improvements to the protocol.
Each proposal is executable code, meaning that there is no space for different interpretations and doesn’t require a centralized team to implement. What seen within a proposal is exactly what will get deployed. If it’s voted in by the community, when a proposal succeeds, it directly upgrades the protocol, allowing for new assets, revised interest rate models and new functionality to be added over time. This puts the power of governance into the community’s hands. It creates a global protocol that is upgradable and can grow alongside the ever-changing needs of its users in new and unique ways. When this video was created, about 2,880 comp was being distributed per day across all eligible markets as market conditions evolve. So to have the allocation of distributed comp between users, the amount of interest paid by borrowers in each market affects how much comp is awarded to participants of that market.
The more interest paid, the more comp is earned. While some markets will earn more common than others, suppliers and borrowers of any specific market will always earn an equal share 100 years from now compound hopes for the protocol and its interest rates to be integrated into many applications around the globe, enabling entirely new products to come to life across a wide range of industries and use cases. This will allow financial and end users to make use of idle crypto assets and gain instant access to borrowed funds all while supporting the ongoing development of unique financial applications and services worldwide, collectively, it is up to comp holders like Maya to decide the future of the protocol with Maya’s help and with the support of compounds, community of developers and users compound hopes to continue to evolve over time, adding new integrations and supported assets to grow the reach and capabilities of the protocol for many years to come. Okay.
So who gets to decide the future of compound protocol, the comp token olders what’d you made six bucks to do what? Tell me what we did. Nothing is that I, well, I ate some peanuts, so I guess I was doing something and we learned different ways to make money. So what’s next. We did this I guys, when you do this and polygon, Ooh, look at that polygon. We haven’t even started probably gone yet. We’ll see. What else did they got for us? Beijing going to give away 6 million tokens. Makes sense. Let’s see, let’s push this button again. I’m already done. I’m already done. All right. So I guess the next one is the graph in polygon. Let’s give polygon to try. All right. See you in a minute.