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3 200 223 €
88 394 644 CETH
88 394 644 CETH
Compound Ethereum (cETH) is a cToken obtained in return for an Ethereum deposit in one of Compound’s liquidity pools.
cETH stands for Compound Ethereum, and it is among one of the cTokens that fuel the Compound protocol. Founded by Robert Leshner, the Compound protocol is a system of openly accessible smart contracts built on Ethereum. The basic objective of the protocol is to allow borrowers to take out loans and lenders to provide them by locking their crypto assets in the protocol. The supply and demand of the crypto assets determine the interest rates to be paid and received by the borrowers and the lenders. These interest rates generate with every block mined. The borrowers can pay back their loans and withdraw their locked or collateralized assets any time they want.
Built on this principle are the cTokens, the Compound protocol’s native tokens allowing the users to earn interest on their money. These cTokens fuel the platform. They serve as the back-end unit of account for the protocol. When you, as a user, inject liquidity to Compound by supplying your assets to the protocol, the platform creates these cTokens to keep track of the funds you have lent as well as the interest you’ve earned on them.
Each time you supply ether to the Compound lending pool, the platform issues your corresponding balance in cETH tokens. The balance accumulates in direct proportion to the stake you have in the Compound ETH lending pool. The interest accrues in terms of each block.
You can use blockchain explorers like Etherscan to see your balance and store them in any Ethereum wallet, such as the Coinbase Wallet or Metamask.
Whenever a market is launched, the cToken exchange begins at 0.020000. This is true for cETH as well. This rate determines how much ether one cETH is worth. The exchange rate increases at a rate equal to the compounding market interest rate. Since every user gets the same exchange rate, you do not need to worry about the uniqueness of your wallet.
You can transfer your cTokens. But transferring your cToken would result in a decline in your balance. You won’t qualify to transfer your cETH if the account has entered the cETH market, and the transfer would put your account into a state of negative liquidity.
When you withdraw cETH from the protocol, your tokens are redeemed for the corresponding quality of the underlying asset.
In natural course, each cETH becomes worth more than when it was minted. This happens due to the interest earned on them. The calculation of the interest, based on the prevailing exchange rate, is done by the protocol itself. You, as a user of the protocol, do not need to worry about doing it yourself.
cETH recorded its all-time high price of $45.58 (~£33.27) on 13th February 2021. Apart from the Compound, the other exchange that allows cETH trading is at 1inch.exchange.
Whenever you supply an asset to the protocol, you get cTokens in exchange. However, the method for getting cETH is a bit different from the other cTokens, such as cDAI or cUNI, or any other cToken for an ERC-20 asset.
When you supply Ether to the Compound protocol, an application can send ETH directly to the payable mint function in the cETH contract. Following that mint, the corresponding cETH is minted for the wallet or contract that calls upon the mint function.
One vital aspect to remember over here is that if you call this function from another smart contract, it needs a payable function to receive ETH when you redeem your cTokens later.
The process is a bit different for the cERC20 tokens. Unlike cETH, minting cERC20 tokens requires the invoking wallet or the contract to first call upon the ‘Approve’ function on the underlying token’s contract.
cETH, like other cTokens, is a vital addition to the crypto market. It serves two purposes. It helps earn interest through the token’s exchange rate. On the other hand, tokenizing the assets offers them more flexibility and expands their functionalities. The assets become freely movable and transferable.
Owing to these facilities, cTokens can reasonably be expected to become a crucial part of the crypto lending ecosystem. With the growing volume of trade in Compound, users will increasingly leverage cTokens to interact with the protocol and mint, redeem, borrow, repay a borrow, liquidate a borrow, or make a transfer.