We announced our listing of cUSDT on June 19, 2020. cUSDT allows holders to earn COMP as interest on their cUSDT balance. Learn more about cUSDT, COMP, and how to earn interest by holding cUSDT in our frequently asked questions below.
What is Compound?
Compound is a decentralized finance lending and borrowing protocol built on Ethereum. The Compound Governance Token (COMP) is the native token of the Compound protocol and provides holders with the ability to participate in protocol governance. Stakeholders who possess at least 1% of COMP tokens in circulation can submit governance proposals; stakeholders with fewer tokens can vote on proposals, or delegate their votes to other members of the community to vote on their behalf. Compound is in the process of turning over development and control of the protocol to its users, and the introduction of COMP is an important step to fully decentralizing governance of the protocol. Learn more about Compound on their website.
What is cUSDT?
cUSDT is a type of ERC-20 token issued by the Compound protocol, called cTokens. cTokens are distributed to users who lend assets on Compound and are used to keep track of the amount of assets lent and the value of the interest accrued. cTokens accumulate interest through their exchange rate against the underlying asset. Over time, each cToken becomes increasingly valuable compared to the underlying. Each asset that is lendable on Compound has a corresponding cToken. cUSDT is the cToken corresponding to Tether USD (USDT). The amount of cUSDT that a user holds will stay constant over time, but when you trade it back into the underlying asset (USDT), the amount of USDT will have increased based on the interest rate.
How do I earn COMP on Poloniex?
You can earn COMP on Poloniex simply by holding cUSDT in your wallet. We currently offer a cUSDT/USDT market. When you deposit USDT and trade it for cUSDT, you will immediately begin accruing COMP proportional to your holdings for as long as you hold at least 40 cUSDT. We will take four cUSDT balance snapshots every day to determine the amount of COMP you receive. The snapshots will occur around 06:00, 12:00, 18:00, and 00:00 UTC each day.
How frequently is COMP distributed to cUSDT holders on Poloniex?
At launch, we will distribute COMP once a week to cUSDT holders. In the coming weeks, we will increase the frequency of COMP distributions to once per day. Each distribution will contain all of the COMP that you have accrued since the last distribution.
Do I also earn interest by holding cUSDT?
Yes, by holding cUSDT on Poloniex, you will begin accruing interest on the underlying asset, USDT. To realize your interest, simply trade your cUSDT back into USDT in our cUSDT/USDT market.
So can I earn COMP and interest by holding cUSDT?
Yes! Let’s say you deposit 100 USDT on Poloniex. If you trade your USDT into cUSDT, you’d get 5,000 cUSDT at the price on June 19, 2020.
5,000 cUSDT will continue to show as 5,000 cUSDT in your balance. When you trade that 5,000 cUSDT back into USDT, you would have >100 USDT. As of June 19, 2020, the Supply APY for cUSDT is 9.8%. You can find the current Supply APY here.
Since you hold over 40 cUSDT, you are also entitled to COMP distributions. There will be 4 balance snapshots each day that determine the amount of COMP you will receive. To start, COMP will be distributed weekly. Longer term, COMP rewards will be distributed daily.
How is COMP distributed to users outside of Poloniex?
COMP, the governance token of the Compound protocol, is not distributed by mining, staking, or through an initial token sale. Instead, COMP is distributed to the lenders and borrowers on the Compound protocol. Each day, a predetermined amount of COMP is distributed to lenders and borrowers across every asset supported on Compound (USDT, ETH, USDC, etc.). The distributions happen at every block and are in an amount proportional to the interest accrued by each asset.
How does the Compound protocol know if you are a lender?
If you hold cTokens (such as cUSDT) in an Ethereum account, you are considered a lender by the protocol and will receive a distribution of COMP tokens every block.
What is the interest rate on cUSDT?
You can see the latest interest rate for cUSDT by looking at the Tether (USDT) Supply APY here.