COMP is the governance token of the Compound protocol, a decentralised finance (DeFi) platform built on the Ethereum blockchain. COMP is an ERC-20 token, distributed to users of the protocol as a reward for participation and used to facilitate the decentralised governance of Compound.

COMP allows token holders to influence the protocol by proposing, debating, and voting on changes, such as adding new assets, modifying interest rate models, or adjusting other protocol parameters. The token underpins the self-sustaining, community-driven model of Compound, ensuring the protocol evolves according to its users' collective decisions.

Launched in June 2020, the COMP token marked the transition of Compound from being developer-led to becoming a community-governed platform, placing decision-making power in the hands of its stakeholders.

The primary purpose of the COMP token is to enable governance over the Compound protocol. Specific uses include:

• Proposal creation: Holders with at least 1% of the total COMP supply can propose changes to the protocol, such as adding new collateral types, adjusting market parameters, or updating the protocol's code.
• Delegation and voting: COMP holders can delegate their voting power to others or vote directly on proposals. This ensures even passive holders can participate in governance indirectly.
• Ecosystem rewards: COMP is distributed as an incentive to users who interact with the Compound protocol, whether by supplying or borrowing assets. This encourages participation and maintains liquidity in the system.
• Reputation and signalling: Holding COMP signifies involvement in the governance of one of DeFi's leading protocols, and large COMP holders often influence key decisions in the DeFi ecosystem.

The COMP token was introduced in June 2020 by Compound Labs, the company behind the Compound protocol. Compound Labs was founded in 2018 by Robert Leshner and Geoffrey Hayes. While the protocol itself was developed and initially managed by Compound Labs, the introduction of COMP facilitated the transition to a decentralised governance model, reducing the role of the founding team over time.

COMP was designed to distribute control of the protocol to its users and stakeholders, ensuring the Compound ecosystem remains decentralised and community-driven. As of its launch, Compound Labs retained a portion of COMP tokens to incentivise developers and fund further research and development.