The Compound Governance Token (COMP) is a management coin in Compound Finance's decentralized loan protocol. This platform is based on smart contracts operating on the Ethereum network and allows users to borrow digital currencies with the prior deposit of cryptocurrency assets as collateral for the loan. The protocol is fully decentralized which means that it automatically sets the interest rates for each digital asset based on the law of supply and demand.
In addition, the COMP token allows the owner to delegate voting rights to an address, wallet, other user, application or DeFi expert of his choice. Anyone who has at least 1% of the COMP token sent to his address is entitled to propose management actions. The spectrum of these activities is very broad and includes activities such as, for example, adding a new asset, modernizing the asset protection factor, changing the market interest rate model, or changing any other parameter, variable or protocol data that can be modified by the current administrator.