Coinbase users can now get a guided introduction into one of the most active sectors of the world of DeFi, thanks to the addition of Compound to the Coinbase Earn program.
Coinbase today added Compound and the COMP token to the Coinbase Earn program, a series of guided tasks that teach users how to earn interest and participate in decentralized governance of the DeFi protocol.
Compound’s inclusion adds further weight to Coinbase’s efforts to onboard DeFi token consumers. It already has lessons on protocols such as loan service MakerDAO and decentralized exchanges Kyber Network and 0x.
Compound allows users to deposit cryptocurrency to earn interest or use as collateral for generating loans. Compound was also one of the first DeFi applications to hand over control from its development team to its community of users and supporters, who vote on development decisions and other issues impacting the future of the protocol.
Compound is just one application in a family of protocols known as DeFi, or decentralized finance. DeFi uses automated code called smart contracts to execute financial processes that would otherwise be handled by a centralized banking entity. Since DeFi applications run on blockchains like Ethereum, they can’t be turned off, and decentralized governance means no one person or group necessarily controls the rules of how they function.
COMP tokens are used to represent voting rights in decisions governing the future development of Compound. They can be earned by depositing cryptocurrency collateral as well as by taking out loans on the platform. DeFi users have deposited more than $850 million worth of crypto into Compound, and more than 5,600 users have thus far taken loans using the platform.
The Coinbase Earn program rewards users in cryptocurrency for learning and completing tasks featuring different cryptocurrencies, usually in the native token of the project in question. Coinbase is one of the main conduits for most new and many existing crypto users, so the incentivized Earn lessons have the potential to show a broad audience the power of DeFi protocols. Coinbase added Compound for purchase and trade in July 2020.
The rewards for completing COMP lessons add up to less than $10, but the real value comes from learning how to interact with DeFi protocols that have the potential to revolutionize how the world manages its money.