I’m proud to say today was my first day using any DeFi application. I’m an avid crypto enthusiast, and just staked a small amount on the Compound application. If all goes well, depending on my understanding of the application and how it works, I’d like to be a more active member in the community and stake more on the app. I have done research, but I haven’t found any soup to nuts, simplistic answers to some of my questions/concerns. I apologize if they are “dumb” questions to any experts, but I am a novice and not only am I very interested in just being apart of this community and the space as a whole, but I’m trying to bridge the gap a bit here. So I figured there would be no better place to learn than from the forum itself. Here are a few questions:
-As a Compound user, I see that there are APRs for borrowers and stakers, do you receive comp payouts for borrowing on top of staking as well? So let’s say you stake 200 DAI and then borrow 150 DAI, do you get COMP distributions for both numbers at the rated APRs?
-I see for both situations there is a DAI APR and a COMP APR, do you get interest on the DAI as well?
-I’m unsure if I fully understand the interest utilization model provided on the Supply numbers page, if someone could just elaborate a bit. Does it have to do with the percent of let’s say DAI being lent out/borrowed at any given time and then the system appropriates an interest rate to the lenders depending on that utilization schedule?
-And lastly, when you vote on a proposal, does the compound you have/control in your wallet get staked to a “Yes or No” vote, or does it get burned/dissipate every time you vote?
Thanks in advance for any help!
Welcome to the community! I’d say for the most part, these types of questions are better suited for the discord, but I’ll try to help out a bit here. Additionally, most answers can easily be answered by reading through the resources channel on the discord.
Compound is a lending platform, therefore, all lenders earn interest and all borrowers accrue interest. These values are in the same currency as the deposit/loan.
Completely separate from all this, Compound is distributing COMP to its users. You earn COMP for borrowing and lending. COMP is used for voting and is never removed from your wallet to vote. It isn’t lost by voting in any way.
Thanks for the quick response! I will sign up for the channel and check the posts!
Ok so you do get rewarded COMP utility tokens borrowing as well. Answers my question, thank you! So the next question is, let’s say I have a balance of 1000 DAI. I then lend out 1000, then I borrow the max on that stake. Let’s say it’s 750. Do I earn for only The 1000, or do I earn on the total 1750
And thank you for the response about the governance voting. So the COMP doesn’t get burned, it’s just the more COMP tokens you own, the higher voting percentage you have. Correct me if I’m wrong.
Also, was my assumption about the interest table correct? Depending on how much on the platform is staked at any given point drives the interest up/down
Thanks again for the welcome message and the help it’s much appreciated!
Hey @jerseydevil and welcome!
- You receive COMP based on all activity in the protocol; in your example, on the 1750 DAI. This is slightly controversial (and could be changed through the Governance process).
- The more COMP you own (and choose to vote; you can also assign your votes to anybody else, while keeping the COMP), the higher your voting percentage.
- Yes, each market has it’s own interest rate model. You can see these models on the asset page (e.g. USDT), and compare how interest rates change based on the utilization of that market.