Compound has announced that their governance token, COMP, will be distributed to all those using the lending protocol.
Governance is ready to scale to the entire Compound ecosystem.
All users and applications built on Compound will continuously, and automatically receive $COMP to shape the future of the protocol.
Learn how it will work:https://t.co/x5Zl86t8Db
— Compound Labs (@compoundfinance) May 28, 2020
As already known, the new Compound platform has its own decentralized governance which can be accessed through a dedicated token, COMP.
This new system was put to the test by Coinbase Custody and no vulnerabilities were discovered, hence everything is now ready for the mass of users using the platform for both lending and borrowing.
A working version is already being tested on Ethereum’s Kovan network and after this phase, it will directly launch on the mainnet.
The tokens that will be distributed are in total over 4 million, contained in a Reservoir contract. 0.50 COMP will be transferred for each block created, so about 0.50 COMP every 2.8 days.
Each crypto will have its own market according to its size. Then, for each market, these tokens will be divided in half between lenders and borrowers and, after they have accumulated 0.001 COMP, they will be added with the next transaction to the wallet of users who will interface with the Compound platform.
The next steps that will precede this revolution will be to abdicate the Guardian function that allows the Compound team to disable the governance in case of emergency, allowing the platform to self-regulate thanks to COMP holders.
The distribution of the tokens, which should start next month, will take place over 4 years and this will allow the community to shape the future of the platform and be encouraged to act in its best interest, as recalled by the founder of Compound, Robert Leshner:
“The individuals, applications and institutions that use the Compound protocol are capable of collectively stewarding it into the future – and are incentivised to provide good governance”.