The Ultimate Guide to Trading Compound With eToro

Compound is a protocol and decentralized software (dApp) running on Ethereum network that was developed to incentivize a distributed network of computers to function as a traditional currency / financial market.

As a DeFi (decentralized finance) protocol, Compound allows several crypto assets in providing service, to lend and borrow without the need for an intermediary such as banks and other financial institutions.

Simply say: Compound provides a platform for users to deposit cryptocurrency into lending pools accessible by borrowers. Lenders will then earn interest from the assets they deposit.

After each deposit, Compound rewards a cryptocurrency referred to as cToken (signifying the deposit) to the lender. Types of cTokens are cDAI, cETH and cBAT.

All cToken are tradeable and transferable unrestricted but can be only redeemed when the cryptocurrency is locked in primarily in the protocol.

To authenticate these activities, Compound uses its native currency the COMP— an ERC-20 token. Each time a user transacts in the Compound market, users are given COMP tokens.

Considering to trade COMP?

You might be considering of trading Compound at this point but in case you do, just click the button below and this will redirect you to eToro's platform for COMP trading. This will give you a preview on how it looks like and should you decide to go on a trade, all you have to do is click the "Sign up" button on that page to quickly register.


77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

History of Compound

Compound was founded by Geoffrey Hayes and Robert Leshner who are both known as avid technology entrepreneurs. In 2018, Compound received $8.2 million funding from venture capital firms Bain Capital Ventures and Andreessen Horowitz.

An additional $25 million funding came in 2019 from the same two venture firms along with Paradigm Capital.

How Does Compound (COMP) Work?

Compound was designed to bridge lenders and borrowers by applying combinations of robust smart contracts that runs on Ethereum blockchain.

Here are the types of Compound users:

  1. Lenders: These are users who deposit their crypto assets to the lending pools where borrowers borrow from. Lenders earns interest from the cryptocurrency they deposit.
  2. Borrowers: These are users who supply cryptocurrency collateral on the Compound protocol and are also permitted to borrow other crypto assets that are supported by the Compound network at a percentage of its original posted value.
Compound logo
Compound logo

Advantages of Compound (COMP)

Compound is known as among the most beneficial cryptocurrency in the market today. First, COMP ushers in a decentralized lending environment to the blockchain community. Anybody can become the borrower who can draw funds from Compound farming pools without having to go through credit checks as borrowed funds are issued straight after a user provides collateral.

Other benefits of Compound include:

  • Passive Earnings
  • Utilizes Bitcoin in DeFi environment
  • Fully Autonomous
  • Secured transactions
  • Interoperability

How Many COMP Tokens in Circulation?

Like Bitcoin, COMP is also set at a specific number of tokens to be circulated. At the moment, this number is set at 10 million COMP. As latest as early 2022, over 6.5 million coins are in circulation.

4.2 million COMP tokens will be distributed among Compound protocol users over a 4-year span.

What is the COMP Tokens of Compound?

COMP is the main governance token of cryptocurrency of the Compound network. This financial instrument allows users or holders of COMP to vote on significant protocol updates and decisions such as setting interest rate, creating new collateral types, adjusting borrowing power and more.

How to Store COMP?

Like storing other cryptocurrencies, if you need to keep your COMP in the long run, it is advisable to keep it in a hardware wallet. A hardware wallet stores your crypto offline in what is called "cold storage". This secures your COMP from online hacking and threats. The Ledger Nano S and the Ledger Nano X both supports COMP.

Or if you are looking to trade COMP through a trading platform such as eToro, you can easily store it in your eToro Wallet.

eToro Wallet app
eToro Wallet app

Investing in Compound (COMP)

As a pioneer of Yield Farming, Compound enjoys a significant standing in the DeFi sector. Because DeFi is just starting to become popular, it also makes Compound attract new users daily. The appeal of earning passively and achieving easy returns make the Compound platform attractive to more users. These are just some of the factors pointing to Compound becoming a premier protocol for many years to come. Therefore, any plans on investing on Compound (COMP)—given that it should be done with diligent research and studying the market—a better idea than investing on other financial assets.

What is Yield Farming?

The Yield Farming protocols is at the heart of Compound's functionality. This allows users to borrow and lend from a selection of cryptocurrencies. Typically, a user can lend and borrow ETHER (ETH), Dai (DAI), USD coin (USDC), Sai (SAI), Basic Attention Token (BAT), Tether (USDT) and more.

How to Buy COMP?

The simplest way to buy COMP is to sign up for an account with a cryptocurrency or trading broker that supports the direct BUY and SELL of COMP. One such cryptocurrency and trading broker is eToro.

The eToro is a great place to start since it offers a straightforward interface that allows for a seamless trading by clicking of a few buttons.

How to Trade COMP on eToro?

  1. On your eToro dashboard, click "Trade Markets".
    Clicking "Trade Markets" on eToro
    Clicking "Trade Markets" on eToro
  2. Select "Crypto".
    Selecting "Crypto" on eToro's Markets screen
    Selecting "Crypto" on eToro's Markets screen
  3. Scroll down to look for "COMP".
    Looking for Compound on eToro's list of crypto assets
    Looking for Compound on eToro's list of crypto assets
  4. Click "Buy" and set the amount you want to invest.
    Buying Compound (COMP) on eToro's platform
    Buying Compound (COMP) on eToro's platform
  5. Click "Open Trade".
    Executing COMP buy order on eToro
    Executing COMP buy order on eToro

Thinking of Trading COMP with eToro?

If you're planning on investing or trading COMP, then it would be simpler to click the button below. This will take you to the eToro COMP trading page where you can easily check the current price of COMP and buy COMP of any value you plan to invest.

Before trading COMP on eToro, just simply open an account with them. Don't worry, the whole process will only take a few minutes.


eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.