What Is Compound USD Coin (CUSDC) How It Works & Where To Buy It?

Compound USD coin (CUSDC) is the token distributed to users that provide USDC for lending on the Compound protocol. The platform allows people to earn CUSDC for lending USD coin and also allows individuals to borrow USDC on the platform.

Currently 1 USDC = 44.259462805623 cUSDC.

Lending protocols like Compound have grown in popularity recently. CUSDC has the 2nd largest market cap on Compound’s platform.

How Compound USD Coin (CUSDC) Works

Before understanding how compound USD coin works – it’s crucial to understand what Compound (COMP) is.

Essentially, users earn yields on tokens they lend to Compound pools. Lenders earn a specific APY % on various tokens that they lend to Compound – the current APY for lending USDC is 1.67%.

CUSDC coins are the coins distributed to USDC lenders – rewards are distributed in CUSDC tokens. Lenders can lend USD coins to Compound by participating in the USDC pool. The entire process is simple – users can lend a variety of tokens to the Compound platform, each with differing APY% rates.

USDC is the 2nd larger stablecoin in the world by market cap, which makes it beneficial to lend it to a platform like Compound where you can earn rewards.

What Is Compound USD Coin (CUSDC) Used For?

The CUSDC pool incentivizes lenders who are seeking to benefit from the Compound platform. Essentially, USDC lenders supply liquidity for USDC borrowers, as well as trade on the Compound platform.

Rewards paid from the USDC pool are CUSDCtokens. Lenders can decide whether to trade the CUSDC tokens or further participate in the protocol.

Compound has become one of the most popular lending protocols in the crypto space. The protocol uses an innovative mechanism to ensure that there is sufficient collateral and a higher supply than the demand for borrowing.

CUSDC funds are typically divided into a collateral factor and a reserve factor. The reserve factor accounts for 7% and the collateral factor accounts for 80%.

To date, there have been 67,458,769,453 CUSDC minted. CUSDC tokens can only be traded on the Compound platform.

Where To Buy Compound USD Coin (CUSDC)

CUSDC tokens are native to the Compound lending protocol. Currently, the lending protocol has more than 15 cryptocurrencies that can be lent or borrowed.

No centralized cryptocurrency exchanges sell CUSDC coins – the tokens are only available directly from the Compound App.

Individuals seeking to participate in lending protocols should always research the protocol, the team of founders, and developers and compare multiple online sources.

About Compound USD Coin (CUSDC)

How long has Compound USD Coin (CUSDC) existed?

The Compound protocol was initially founded in 2018 by Robert Leshner and Geoffrey Hayes. The founders have extensive experience and have worked at Britches, which facilitated the aggregation of inventory from local shops to be sold on PostMates.

CUSDC was one of the first reward tokens added to Compound because of the high demand for USDC. The compound USD coin has also managed to not deviate too drastically in price, which encourages users to continue lending to and borrowing from the platform.

More than $1.5 billion USDC has already been lent to the Compound platform making it the 2nd most lent currency on the platform.

What’s controversial about Compound USD Coin (CUSDC)?

New projects are constantly emerging in the crypto space. Many decentralized platforms are garnering user adoption and popularity, and among those are lending protocols such as Compound. It’s crucial to research projects, their history, founders, and any other important information.

And like other projects, Compound has already had its share of controversy. Let’s take a look at the top two controversies surrounding Compound USD Coin (CUSDC).

• Governance attack – One of the most notable controversies surrounding the Compound lending protocol was a governance attack that was initiated. The COMP token is the governance token of the protocol and holders of the token receive voting rights proportionate to the number of tokens they hold.What makes this especially risky for a protocol like Compound is that anyone can borrow COMP and affect proposals in a biased way. The influential TRON founder, Justin Sun, was accused of trying to affect a governance vote after he borrowed more than 90k COMP before an extremely controversial governance proposal was made.
• Lenders VS Borrowers – Lending protocols need to have a sufficient amount of collateral for potential borrowers. This is necessary to maintain an equilibrium and bolster participation. However, the number of borrowing taking place on the platform seems to be unbalanced – indicating a shortage of demand for borrowing activity.There has been a notable surge in the number of tokens being lent to the platform but there has yet to be a significant surge in borrowing activity. Many individuals believe that retail consumers are still fearful of lending protocols, which is leading to a lack of interest in such protocols.

How many Compound USD Coin (CUSDC) tokens are there?

At the time of writing, CUSDC’s circulating supply is 67,458,769,453.

The total supply of Compound USD Coin (CUSDC) is 67,458,769,453.

The current Compound USD Coin price is $0.02259.

The current price fluctuates in the same manner as most cryptocurrencies, according to the relative supply and demand.

Can Compound USD Coin (CUSDC) be mined?

Compound USD Coin (CUSDC) is not a mineable cryptocurrency. CUSDC tokens are distributed to individuals who lend USDC to the Compound platform.

These individuals then earn CUSDC rewards for lending USDC to the platform. The average APY % is around 1.67%.

What is the market cap of Compound USD Coin (CUSDC)?

The market cap of any cryptocurrency can be calculated by using the same formula: total amount of coins in circulation times the current market price.

Compound USD Coin (CUSDC) Market Cap = 67,458,769,453 CUSDC x $0.0225 = $1,52 billion.

There are, however, discrepancies in the CUSDC tokens circulating supply. CUSDC price statistics can be found here.

The market cap is always fluctuating according to circulating supply and market price.

Biggest Competitors Of Compound And Compound USD Coin (CUSDC)

Compound is an innovative lending protocol that rewards lenders with native assets according to a specific APY %. The decentralized lending protocol has garnered popularity and seen a significant amount of lending and borrowing activity.

Compound has amassed some notable partners including Coinbase and A16Z. A more informative list of Compound’s partners and major investors can be found here.

When considering Compound’s competitors it’s important to consider other lending protocols.

The biggest competitors of Compound currently are:

• Maker
• AAVE

What Are The Future Plans For Compound And Compound USD Coin

Compound is actively establishing itself as one of the most innovative and trustworthy lending protocols. However, the lending protocol does have some significant competition.

Compound plans to include more pools where lenders and borrowers can participate – at the time of writing, there are 20 assets available on the Compound market.

Compound has announced its intention to bolster adoption and increase its market share in the decentralized lending protocol sector. One of the main factors that will likely increase the success of the platform is the addition of multiple digital assets. The larger the variety of assets available for lending and borrowing, the more appealing the lending platform will be to consumers.

Pros And Cons Of Compound And CUSDC

Pros:

• Rewards mechanism – Lenders are incentivized to participate in CUSDC lending pools because they receive CUSDC tokens as a reward. There are multiple pools on the platform, each with a differing interest rate. With the current price of CUSDC, lenders receive a generous reward for their lending activity. The USDC trading volume is also the 2nd largest on the platform.
• One of the largest lending protocols – Compound is currently among the top lending protocols. It is seen as trustworthy and credible which puts the platform at an advantage compared to emerging lending protocols that are entering the crypto space.
• Easy to navigate – Blockchain platforms are characterized by complex systems that the average person doesn’t understand. There is a need for platforms to provide users with an easy-to-use platform that isn’t complex. Compound’s platform is simple and easy to navigate; users can’t buy compound USD coin but are rewarded in CUSDC. The circulating supply and Compound USD coin price can be seen on the platform.
• Liquidity/collateral – Users are always encouraged to do their own research and analyze data carefully. This is especially important when considering the liquidity provided by lending protocols. The CUSDC price is affected by supply and demand, as are all native compound tokens. One of the major pros for Compound and CUSDC is that there is more than enough liquidity to meet the demand for USDC borrowing

Cons:

• COMP governance token – One of the unique risks associated with a lending protocol like Compound is the ability for any user to borrow a significant portion of the COMP tokens max supply. Holders of COMP tokens receive voting rights which means that there is potentially an element of bias that can occur in governance proposalsThis is dangerous because the amount of COMP tokens held by a user determines the weighting of their voting power.
• Low interest rates / APY – The platform incorporates smart contracts and has seen explosive growth in recent months but the interest rates offered to lenders are relatively low. USDC lenders typically receive a 1.67% APY which is relatively low, even though it’s a low-risk investment. Although, this may be preferential for users seeking to avoid extreme price volatility that can sometimes even occur in a 24-hour period.