How to Earn COMP Tokens with Compound Finance

Transcript

hi everyone this is d5 dad so today is the day that the compound protocol begins distributing its governance token comp so what does that mean and how do i earn that token uh so currently the compound protocol the team is in the transition of decentralizing and part of that means enabling a token comp which allows you to vote on upgrades and proposals to the comp protocol so the application itself is something that i've commonly used to either lend or supply digital assets and earn interest or you can borrow assets and you can pay interest for borrowing those

so uh if you go to compound.finance click on the app button you'll end up on this dashboard in this simple example i have lent one die and that means that i am you know earning interest uh on that die and so the way that i am able to earn the comp token is that uh they are distributing approximately 2880 comp uh per day and then it's distributed proportional to the interest being accrued in that market and then 50 of the distribution is earned by suppliers 50 by borrowers so what does that mean

if we look at how much interest is paid per day across the nine different markets on compound you would notice that there's a lot more interest being paid on die there's a lot more interest being paid on tether and a lot more on usdc so if i am lending or borrowing in either of these or any of these markets but especially die tether in usdc i'm i'm earning a portion of that uh of of those comp tokens so keep in mind uh also it comes down to how much am i lending and borrowing so there's about 17 million die in the pool so keep in mind that i am i'm only lending one die so that's you

know one die of the 17 million which is a very very very small fraction and then on top of that the 2 80 is split according to the proportions of interest being paid here and the cool thing is that i i don't have to keep track of any of this just because it's all run by smart contracts and so that comp will accrue in my voting wallet once i've earned 0.001 actually let's just double check that there we go once i've accrued at least 0.001 from a market you can withdraw all undistributed comp from the protocol so once i have earned the comp token uh

which again will show up here in my voting wallet i can choose to use that to vote on future governance proposals or i could actually delegate those votes to someone else to do it so if you notice here instead of manual voting i'm going to choose to delegate my voting and what's cool about this is you actually can click here on the delegate leader board take a look at others that hold lots of these tokens and these tend to be investors and uh you know partners like arjun or dharma anyone who's using the the compound protocol there's even like the likes of a16z in here so they've obviously got a lot they were investors

but one of my friends ryan uh is holding some comp tokens so i'm actually going to let him vote for me just in the future i trust that he will probably pay closer attention than i will to some of these and then i can even look back at his voting history or any of their voting histories just to see what they voted for and against he voted against usdt support if i agree with that maybe that's another reason to delegate my votes to him so if i go back to this actually i'm going to go ahead and copy ryan's address so this is just his wallet address that holds his comp tokens and then i'm going to go ahead and add that there we go and i'll click delegate votes

and it should be i think it's just one meta mask transaction i guess we'll find out here all right and then let me just double check what is the gas price today so i'm going to uh eat gas station dot info i'm looking it up on my phone right now and it looks like i need to put in a gas price of 30 gway or more so great that works 33 and there we go cool and then once that confirms just it lets me know that uh in the future whatever balance of comp

tokens i have here ryan will then be able to use those to vote oh and there we go it looks like it confirmed yep all good to go all right we're all set so i am in a place where what i'm able to earn the comp token because i am lending die you can lend or borrow from any of the nine markets on compound all of my uh comp tokens will automatically accrue here in my voting wallet and then i have the choice of uh you know collecting slash withdrawing those once it hits 0.001 and for right now i'm

you know taking the pressure off myself to vote on any future compound protocol proposals and i'm allowing someone else ryan to be able to use my my comp tokens that i earn so other than that let me know if you have any questions and i hope you find this helpful you