What Is Compound Ether (CETH) How It Works & Where To Buy It?

Compound Ether (CETH) was created as a cryptocurrency that simplifies earning yields by lending out cryptocurrencies. The CETH token was created and distributed by Compound (COMP).

Lending protocols have drawn a lot of hype and attention in the crypto space recently. CETH is a governance and incentive token used to reward lending activity.

 

How Compound Ether (CETH) Works

Before understanding how compound ether works – it’s essential to understand what Compound (COMP) is.

The Compound protocol allows users to earn yields on tokens they lend to Compound pools. Lenders earn an APY % on tokens that they lend to Compound – the current APY for lending ETH is 0,05%.

Essentially, CETH coins are the coins lenders receive in exchange for their ETH – rewards are also in CETH tokens.

Lenders agree to lend ETH to Compound by engaging with the CETH pool, the process is relatively simple, and there are a number of tokens that individuals can lend to Compound – and earn interest on them.

Ethereum is a widely traded crypto asset, which makes it favorable to lend it to a platform where you can earn interest.

The exchange rate between the two tokens is currently: 1 ETH = 49.844468023000005 cETH.

 

What Is Compound Ether (CETH) Used For?

The CETH pool incentivizes lenders who lend their ETH with CETH tokens – once they lend their ETH, they receive the equivalent amount in CETH tokens.

Every reward paid from the CETH pool is in CETH tokens. Lenders can then decide what they intend to do with their rewards, as there is a relatively stable circulating supply of CETH tokens, the market price fluctuates often.

Compound has also seen very drastic market development since its inception, with its CETH pools being the most popular option for lenders.

CETH funds are divided into a collateral factor and a reserve factor. This is necessary so that the compound protocol maintains its integrity by having enough collateral for the tokens they’re distributing and minting.

You can check this list to find out where the CETH token can be traded.

 

Where To Buy Compound Ether (CETH)

CETH tokens are relatively new additions to the crypto space. Compound’s lending protocol has allowed for more than 15 cryptocurrencies to be borrowed from Compound, including CETH tokens.

There aren’t any centralized cryptocurrency exchanges that sell CETH coins – the tokens are only available directly from the Compound App. Individuals can also purchase CETH on the Uniswap decentralized exchange.

Five of the most popular crypto exchanges used by US traders are:

1. Gate.io
2. HTX
3. KuCoin
4. HTX
5. Crypto.com

Individuals seeking to participate in lending protocols should always research the protocol’s smart contract functionality if there’s any history of previous exploits, and whether the APY % is competitive.

 

About Compound Ether (CETH)

How long has Compound Ether (CETH) existed?

Compound was founded in 2018 by Robert Leshner and Geoffrey Hayes. The founders previously worked with Britches, which facilitated the aggregation of inventory from local shops to be sold on PostMates.

CETH was one of the first tokens added to Compound because Ethereum is among the most sought-after cryptocurrencies in the world. CETH pool offers a relatively low APY % but it still quickly became the most popular pool on Compound – more than $6 billion has been lent to Compound.

The CETH price history is closely correlated to the ETH price history – the compound ether price isn’t pegged to the ETH price.

What’s controversial about Compound Ether (CETH)?

There are new projects constantly emerging in the crypto space. Many decentralized platforms are gaining immense popularity and among those are lending protocols like Compound. It’s always important to research projects, their history, and founders and do diligent research.

Let’s take a look at the top two controversies surrounding Compound Ether (CETH).

• Governance attack – It’s important to understand how proposals are either accepted or refused in protocols. A decentralized finance protocol such as Compound has a system in place whereby only COMP token holders can vote.The COMP token is the governance token – the voting power is weighted according to how many tokens the holder has. What makes this dangerous for a protocol like Compound is that anyone can borrow COMP and sway proposals in this way. Justin Sun was accused of trying to sway a governance vote after borrowing more than 90k COMP before a controversial proposal was made.
• More lenders than borrowers – While it may seem perfectly normal and necessary to have more assets available from lenders than people seeking to borrow assets, the balance seems off with Compound. Let’s take a look at the most popular respective pool, the CETH pool; according to this, there’s currently been more than $6 billion lent but only $330 million borrowed.Many people have highlighted the major differences and have raised concerns. However, lending protocols are relatively new platforms and user adoption might still take some time.

How many Compound Ether (CETH) tokens are there?

At the time of writing, CETH has a circulating supply of 48,763,550 CETH.

The total supply of Compound Ether (CETH) is 48,763,550.

Can Compound Ether (CETH) be mined?

Compound Ether (CETH) is not a mineable cryptocurrency. CETH tokens are distributed to individuals who lend ETH to Compound.

These individuals earn CETH yields by lending ETH. The average APY % is around 0.05%.

What is the market cap of Compound Ether (CETH)?

Simply put, the market cap of any cryptocurrency is the total amount of coins in circulation times the current market price.

Compound Ether (CETH) Market Cap = 48,763,550 CETH x $57,84 = $2,82 billion.

The CETH token’s all-time high was $96 on November 9th, 2021.

The market cap fluctuates according to circulating supply and market price.

 

Biggest Competitors Of Compound And Compound Ether (CETH)

Compound is a lending protocol that incentives lenders with an APY % for assets that they lend to Compound. The decentralized finance platform has attracted major investors and has quickly garnered a substantial amount of user adoption, as well as lending and borrowing volume.

Some of the most notable partners include Coinbase, A16Z, and Paradigm. Click the link for a more comprehensive list of Compound’s partners and major investors.

In the world of crypto it’s especially important to compare projects logically – just because two projects may have similar token prices and circulating supplies, doesn’t justify a comparison.

The biggest competitors of Compound are other lending protocols that aim to offer individuals a more competitive APY % for assets that they lend to the platform.

Two of the most influential lending protocols are:

• Maker
• AAVE

 

What Are The Future Plans For Compound and Compound Ether

Compound aims to establish itself as one of the most influential and appealing lending protocols in the crypto space. It has some significant competition but it also has major partners and investors.

Future plans for Compound include adding more pools to the protocol – currently, there are 20 assets available on the Compound market.

If Compound is seeking to increase user adoption and grow the platform into one of the most prominent lending protocols on the market, there needs to be: more additions to the number of assets available, a more competitive APY % for lenders, and more innovation.

The CETH digital asset is simply distributed and minted according to the amount of ETH being lent to Compound. The token is devoid of multiple markets that trade CETH and is limited to only Compound and Uniswap.

This means that the Compound Ether price and trading volume are congruent to the markets the asset is available on – this eliminates the potential for arbitraging CETH across multiple exchanges and also diminishes the desire for many individuals to acquire CETH.

 

Pros And Cons Of Compound And CETH

Pros:

• Lenders earn rewards – Compound has rapidly grown to become one of the most well-known decentralized finance platforms. It offers users the option of borrowing and lending 20 digital assets, each with varying interest rates. Lenders accumulate interest from the tokens they lend to Compound.
• Among the top lending protocols – Compound is one of the top lending protocols on the market. The credibility of Compound is significantly superior to other emerging lending protocols.
• Easy user experience – One of the biggest issues with decentralized finance platforms is that they’re difficult to navigate. Compound is very user-friendly and the app is easy to navigate – users simply connect their wallets and start interacting with the platform.
• Significant liquidity/collateral – One of the major pros of the CETH token and the Compound lending protocol is that there is much more being lent to Compound than assets being borrowed from Compound. For example, the amount of ETH being borrowed is only $330M but the amount being lent to Compound amounts to $6 billion.

Cons:

• Governance hacks – Compound is subject to a unique risk, in that the platform positions itself as a lending protocol with the governance token being COMP. However, this can be risky because any individual can lend a substantial amount of COMP tokens.This is dangerous because only COMP token holders can vote on proposals, and the amount of COMP tokens they hold gives their votes more or less weight.
• CETH token availability – The CETH token is only available on Uniswap and Compound. This is restrictive in terms of active trading and markets when compared to other coins like Bitcoin. The more markets a coin is available in, the more fluctuation and growth potential it has. Compound protocol and the Compound ether price have steadily gained ground but without more markets, growth might become stunted.