1H % ROI
24H % ROI
7D % ROI
1H % ROI
24H % ROI
7D % ROI
4 903 514 €
188 107 903 669 CDAI
188 107 903 669 CDAI
Compound DAI (cDAI) is a cToken, or Compound token, derived from DAI. It was added to the V2 protocol. Compound users can provide cDAI that other users will borrow for interest.
Compound Dai (CDAI) is a cToken that is issued by Compound (COMP), an algorithmic, autonomous interest rate protocol whose main goal is to unlock a plethora of open financial applications. Compound Dai has a fully diluted market cap of a tad over $43 million (~£31.2 million) and a total market cap of $2.60 billion (~£1.89 billion).
There are a reported 25 billion CDAI tokens in circulation. To understand what Compound Dai is, we need to first understand what Compound is. Compound is a decentralised finance (DeFi) cryptocurrency lending protocol that allows users to earn interest on deposited cryptocurrencies.
You can deposit a cryptocurrency into a Compound pool and earn interest on the same. A borrower can then borrow crypto tokens from a Compound pool after he first supplies another type of cryptocurrency as collateral. Interestingly, supplied crypto tokens earn interest as well but you cannot redeem or transfer crypto assets while they are being used as collateral.
If you deposit Dai (DAI) into a Dai Compound pool, you will receive CDAI tokens in return. The exchange rate of Compound Dai will increase over time to the underlying Dai. This means that you can redeem CDAI tokens for more Dai than you initially put in – this is essentially how the interest is distributed.
Dai is one of the most popular cryptocurrencies held on the Compound platform.
Dai is a stablecoin that aims to keep its value as close to the US dollar (USD) as possible. Of the cryptocurrencies that can be put into a Compound pool on the Compound protocol, Dai is the second-most popularly supplied and borrowed cryptocurrency, with a total borrow volume of over $2.2 billion (~£1.60 billion).
Given the fact that Dai is a stablecoin, its price will more or less remain constant around the $1 (~£0.73) mark. When Dai is deposited into a Dai Compound pool, you will receive CDAI tokens that are automatically minted by smart contracts. As has been mentioned in the previous section, the exchange rate of Compound Dai will increase over time to your underlying deposit.
You can then proceed to redeem CDAI tokens. Compound allows you to earn interest on your deposited cryptocurrencies which would otherwise be lying idle at an exchange. The reason why stablecoins like USD Coin (USDC) and Dai are popular for both lending and borrowing is that their price remains constant. They are not volatile in nature like altcoins.
You can rest assured that your investment in Dai will be secure on the Compound platform. When you eventually redeem Compound Dai for DAI tokens, the value of your initial investment will be the same, plus you will also reap the benefit of interest that you will gain on CDAI tokens.
If you borrow crypto tokens from a Compound pool, you must first supply another type of crypto as collateral.
So let’s say you want to borrow ETH tokens and supply DAI tokens as collateral. CDAI tokens will be minted and your supplied collateral assets will earn interest as well. That said, you cannot redeem CDAI tokens until you return your loan. The amount of crypto tokens that you can borrow depends upon the posted collateral factor for a cryptocurrency.
So if you supply 1,000 DAI tokens and the posted collateral factor for Dai is 75%, you can only borrow 750 worth of Dai in the form of ether (ETH).
Unfortunately, you cannot buy CDAI tokens at a crypto exchange. While Compound Dai is listed on Crypto.com as a part of the Crypto.com Price Index, you cannot buy the crypto token at the exchange. To obtain Compound Dai tokens, you must deposit DAI tokens into a Dai Compound pool. As and when you do this, you will receive CDAI tokens in return.
You can then redeem these tokens for more DAI tokens when the exchange rate for Compound Dai increases. You can store your CDAI tokens on a Trezor-based wallet like Trezor One or Trezor Model T. You cannot make use of Ledger-based wallets for Compound Dai storage at the time of writing.
Compound is an interesting DeFi project. The ecosystem is quite similar to Aave (AAVE) but with an interesting difference. While both asset-lending platforms offer loans that are over-collateralised, Compound offers interest on assets that are locked as collateral as well. Compound Dai is one of the most popular assets on the platform.
While you cannot buy Compound Dai at an exchange, its interest-bearing schema on the Compound protocol makes it an intriguing avenue for investors.