That is - the ability to borrow cryptocurrency, or earn interest for making your cryptocurrency available to loan out.
Coinbase isn't the only one who jumped in with Compound on this $8.2 million seed round of investments - venture capitalist Andreessen Horowitz, along with Polychain Capital and Bain Capital Ventures are in as well.
With FIAT cash in the USA, interest rates are determined by the Federal Reserve - in this case the rates will be set by Compound, and constantly change based on supply and demand and market conditions.
It's an idea that has some real potential, if someone who's simply holding on (HODLing) to their cryptocurrency assets is given the option to earn interest, there's no reason not to. What i'm personally wondering is if there will be a large enough demand for people on the recieving end of these loans.
You can check them out at https://compound.finance
Author: Oliver Redding
Seattle News Desk
