## Why are DeFi players borrowing money in Compound?

Traditional banks have monopolized the lending business for thousands of years, and now they have been overturned by an on-chain protocol called Compound.

**The core logic is very simple**: Instead of having your crypto assets sitting idle in a wallet, you might as well throw them into the liquidity pool of Compound and earn interest passively. Compound uses smart contracts to automatically match borrowers and lenders, with no banks, no intermediaries, and completely decentralized.

**How to make money? Three ways**:
1. **Deposit and Earn Interest** - Deposit and earn interest, with automatic compounding every 15 seconds.
2. **Borrowing Against Collateral** - Borrowing money from the liquidity pool after over-collateralization, then leveraging or performing other operations.
3. **Mining** - Reward lenders and borrowers with COMP tokens, potentially increasing yields by up to 40 times with InstaDapp.

**How is the interest rate determined? The algorithm adjusts automatically** - The more demand there is, the higher the interest rate (up to 15%), this is the power of the market.

**What is COMP token**: A governance token with a total supply of 10 million, where holders vote to decide protocol upgrades. Currently, over 8 million have been circulated.

**Advantages vs Disadvantages**:
✓ Zero entry threshold, zero transaction fees, supports multiple chains, secure and guaranteed (after multiple audits)
✗ There are only more than 20 supported currencies, the learning curve is steep, and beginners can easily fall into pitfalls.

**Summary in one sentence**: Compound gives your idle coins a "bank account", but you need to do your own homework.