Question 1

What is COMP?

Accepted Answer

COMP is Compound's ERC-20 governance token. Its role is to distribute decision-making power over protocol changes to holders and their delegates. It is not a market position received when a user supplies assets, nor does it directly represent a particular deposit or borrowing transaction. Holders can exercise governance rights themselves or delegate voting power to an address. Governance power is related to the amount of COMP delegated to that address, so after tokens are transferred in, transferred out, or re-delegated, the voting weight available to the relevant address also changes.

Question 2

What is the purpose of holding COMP?

Accepted Answer

The core purpose of holding COMP is to participate in Compound protocol governance, not to receive a fixed return. Governance can make decisions on protocol changes, such as adjustments to protocol parameters, market support, or other actions within the scope of governance authority. Actual decisions are not automatically made by a single holder: participants who meet the governance rules first submit proposals, then addresses with voting power vote; approved actions must also be queued in the timelock and can be executed only after the waiting period ends. Thus, COMP is used to participate in this decision-making and execution process.

Question 3

Can COMP voting be delegated?

Accepted Answer

Yes. COMP holders can delegate voting power to their own address or to another representative address; what is delegated is governance voting power, which does not mean transferring token ownership to the representative. After delegation, the governance contract calculates an address's voting influence based on the COMP voting power received by that delegated address. If a holder's balance changes or delegation is moved to another address, the voting power of the former delegate and the new delegate adjusts accordingly.

Question 4

How might COMP distributions be received?

Accepted Answer

In markets configured to distribute COMP, users may accrue COMP when supplying assets or borrowing assets. Whether a distribution can be received first depends on whether that market and that type of activity are included in the distribution arrangement, rather than COMP being guaranteed merely by using Compound. Distribution arrangements are determined by governance and may be configured by market and activity. Therefore, a user's actual outcome depends on the market used, the supply or borrowing activity performed, and the governance configuration in effect at that time; it does not constitute a fixed or guaranteed return.

Question 5

Does a governance proposal take effect immediately after it passes?

Accepted Answer

No, it does not take effect immediately. After a governance proposal passes, the related actions must first be queued in the timelock; the actions can be executed only after the waiting period ends. This delay separates “a vote passing” from “an on-chain change being executed” into two stages: the community and users can understand the change and its effects during the window after approval but before execution, and execution authority cannot be invoked immediately when the voting result appears.

Question 6

Are COMP and cTokens the same type of token?

Accepted Answer

No. COMP is a token used to participate in Compound protocol governance; a cToken is a certificate of a market position received after a user supplies assets in a Compound v2 market. They answer different questions: the former is associated with governance rights, while the latter is associated with a supply position in a particular market. Therefore, holding cTokens does not mean holding COMP and does not automatically grant COMP governance voting power; conversely, holding COMP does not mean owning a supply position in a particular market. When using different versions or products, the position-token mechanism actually used by that market should be used to make the determination.

Question 7

Can holding a small amount of COMP change the protocol independently?

Accepted Answer

Usually not. An address's influence depends on the COMP voting power delegated to it, and the governance process also has proposal and voting requirements. Holding a small amount of COMP allows participation in or delegation of voting, but does not mean a person can independently cause a protocol change to pass. This also means that “amount held” should be distinguished from “governance outcomes one can participate in”: the former affects the address's voting weight, while the latter also depends on whether a proposal reaches a vote, how other voting power is used, and whether approved actions can complete timelock execution.

Question 8

Will COMP distributions remain unchanged indefinitely?

Accepted Answer

It is not guaranteed to remain unchanged. COMP distributions can be configured by governance for different markets and activities, and the scope or arrangements participating in distributions may change when governance decisions change. Therefore, having received distributions in the past when supplying or borrowing assets in a market does not by itself prove that the same arrangement will continue to apply in the future. To assess whether an activity may accrue COMP, consider both the market in which the activity occurs and the governance configuration in effect at that time.

Compound (COMP) Price