Buy Compound

Compound is a lending protocol. It lets people deposit crypto to earn interest, and borrow against what they have deposited, with rates set by an algorithm rather than by a bank and with no application and no credit check. COMP is its governance token: it gives holders a vote over how the protocol operates, and that is the main thing it does.

Compound matters historically as much as commercially. When it began distributing COMP to the people using it in June 2020, it set off the liquidity mining boom that shaped decentralized finance for the next two years. Our guide to decentralized finance covers the category, our guide to Ethereum covers the network Compound was built on, and our guide to altcoins explains where tokens like COMP sit relative to Bitcoin.

Where did Compound come from?

Compound Labs was founded in 2017 by Robert Leshner and Geoffrey Hayes, and raised venture funding across 2018 and 2019. A first version launched in 2018, and version two arrived in 2019 with the design most people remember: pooled markets for individual assets, interest bearing cTokens issued to depositors, and a contract called the Comptroller enforcing what could be borrowed against what.

COMP distribution to users began on 15 June 2020. Handing a governance token to the people using a protocol was novel then, and it worked well enough that most of the sector copied it within months. Leshner has since left to found a separate company, and the protocol's direction is now set by token governance and by the Compound Foundation, established in 2025.

How does Compound actually work?

Two versions of the protocol exist, and they are structurally different.

Compound v2 put every asset in its own pool. You could supply any listed asset and borrow any other, with your borrowing capacity determined by collateral factors set per asset. Depositors received cTokens representing their share of a pool, and those tokens accrued interest by rising in redemption value rather than by growing in number.

Compound III, known as Comet, narrowed the design deliberately. Each market has a single borrowable base asset, and everything else in that market can only be posted as collateral. Collateral is not lent out. Each market has its own risk parameters, supply caps and price feeds, so trouble in one market cannot spread to another. The first Comet market was built around USDC, a stablecoin, and Compound III now runs on Ethereum alongside networks including Arbitrum, Base, Polygon, Optimism, Scroll, Mantle, Linea, Ronin and Unichain. Our guide to blockchain layers explains how those networks relate to Ethereum.

Interest rates in both versions respond to utilization. The more of a pool that is borrowed, the more expensive borrowing becomes and the more suppliers earn, with the curve steepening sharply past a set point so that lenders are not left without liquidity. The Compound documentation is the primary technical source. Every parameter in that description is set by governance and can be changed by a vote.

What is COMP, and what does it do?

COMP has a fixed maximum supply of ten million tokens, divided at launch between users receiving it through distribution, Compound Labs shareholders, founders and future team members, and reserves controlled by governance.

It is a governance token. COMP holders and their delegates propose changes and vote on them. Adding a market, changing a collateral factor, adjusting an interest curve, spending treasury funds and upgrading contracts all run through that process. It can be delegated. Voting power can be handed to another address without transferring the tokens, which is how most voting actually happens. It is used as an incentive. Governance can direct COMP to suppliers and borrowers in particular markets. Those rewards have been cut repeatedly by vote, and they continue only while further proposals top up the contracts that pay them. It does not entitle you to protocol revenue. Interest paid by borrowers goes to suppliers and to protocol reserves. Holding COMP gives you no claim on that income, and there is no automatic distribution, fee share or buyback.

That last point is the one most often misunderstood, and it sits behind the most turbulent episode in the protocol's history.

What happened in the 2024 governance fight?

In 2024 a group known as the Golden Boys, led by a large holder using the name Humpy, tried to move a substantial share of Compound's treasury into a product they controlled.

The first attempt, in May 2024, asked for 92,000 COMP to be placed in a vault called goldCOMP. It was rejected and withdrawn. A revised version failed in July. A third proposal, put to a vote on 28 July 2024, asked for 499,000 COMP, worth roughly 24 million US dollars at the time, with withdrawals from the vault controlled by the group's own multisignature wallet. It passed, 682,191 votes to 633,636, on a turnout of 57 addresses.

Compound's own security advisers called it a governance attack. A separate proposal was filed to move administrative control of the protocol's timelock to a community wallet as a safeguard. Within two days a compromise was brokered: in exchange for cancelling the treasury proposal, a commitment was made to build a staking product directing 30 percent of current and future protocol reserves to COMP holders who staked. Both proposals were cancelled on 29 July 2024.

Two things are worth taking from that episode. Concentrated voting power can carry a proposal in a token weighted system when turnout is low. And that commitment is the reason many people expect COMP to pay something. Designs for staked COMP have been debated in governance since, but a live product distributing protocol reserves to COMP holders should not be assumed. The Compound governance forum is where the current position is recorded.

Version two is closing, and version four is being funded

Two large changes are underway at once.

Compound v2 is being wound down. A deprecation proposal from the risk manager Gauntlet was published in September 2025 and executed on 20 October 2025. It paused new supplying and borrowing across v2 markets while leaving repayments, withdrawals, transfers and liquidations open, and set reserve factors to 100 percent so that interest accrues to reserves rather than to suppliers. Later phases have tightened parameters further. Existing positions are not seized, but v2 is not somewhere to open new ones.

Compound v4 is a funded plan, not a product. In April 2026 the Compound Foundation proposed a two year program of 52 million US dollars, split between operations and growth incentives, with 14 million released upfront and later tranches gated on milestones including an institutional integration partner, a curator onboarding and a public testnet launch. Most of the money sits in a segregated wallet under a committee multisignature. Governance approved it, and in August 2026 the Foundation announced a leadership team recruited from Coinbase Custody, the Near Foundation and Maple Finance.

The v4 thesis is a change in who Compound serves. Rather than running a website for individuals, the plan is to supply lending infrastructure to brokerages, wallets, fintechs, custodians and institutions, with permissioned vaults for counterparties that need identity checks, tokenized equities usable as collateral, and a hub and spoke architecture that pools liquidity centrally while keeping individual markets isolated. Progress is published as monthly updates on the governance forum. Whether it ships is the open question, and it is the main thing COMP is currently priced against.

What are the risks of holding COMP?

No claim on revenue. COMP is a governance and incentive token. There is no dividend, no interest and no enforceable claim on the protocol's income or its reserves. Governance risk is not theoretical. The 2024 episode showed that a determined holder can pass a treasury proposal against the wishes of much of the community, and low turnout makes that easier rather than harder. Execution risk. Version four is a funded program with a private alpha as its near term target, not working infrastructure. Roadmaps in this sector slip, and the strategy depends on institutions agreeing to integrate. Lost ground. Compound was the leading lending protocol in 2020 and is not now. Aave, Morpho and Spark have taken much of the market. Winning share back is a commercial problem, not a technical one. Smart contract and oracle risk. In November 2020 a price spike on one exchange fed through Compound's price oracle and triggered around 89 million US dollars of liquidations. In September 2021 a bug in an approved Comptroller upgrade wrongly distributed roughly 80 million US dollars of COMP. Both came through the normal governance process. Front end and phishing risk. Compound's website has been hijacked twice, in July 2024 and again in March 2026, when an attacker used credentials from a stale cloud service account to swap landing page assets for a site harvesting off chain signatures, including COMP delegation approvals. The contracts held. Users were the target. Multi network complexity. Compound III runs across many networks, each with its own bridge, sequencer and failure modes, and each adding somewhere for something to go wrong. Volatility. COMP is not a stablecoin. Its value moves sharply and can fall substantially. No consumer protection. Crypto assets held on a trading platform are not bank deposits. COMP is not covered by FDIC deposit insurance or by SIPC protection. You should be prepared to lose the money you put in.

Buying COMP with US dollars on CoinJar

CoinJar has operated since 2013 and lists COMP against US dollars, so you can buy, sell and hold it without converting through another cryptocurrency first. Current charges are on our fees page, and live US dollar rates are on our cryptocurrency prices page.

CoinJar, Inc. is registered with FinCEN as a money services business, NMLS ID 2492913, and holds money transmitter licenses in a growing number of states. You can check whether CoinJar operates in your state before signing up.

How is COMP taxed in the United States?

The IRS treats digital assets such as COMP as property. A taxable disposal can occur when you sell it for US dollars, trade it for another cryptocurrency, spend it or give it away.

The IRS sets out its approach on its digital assets page. Our guide to reporting your transaction history explains how to get the records you need. This is general information, not tax advice. Consider speaking to a qualified tax adviser about your circumstances.