Learning the friendly way

Never underestimate the power of emotions and trading. While this might sound redundant, emotions play a much larger role in decision making than most might like to admit, and crypto trading is no exception. In order to make successful decisions, traders need to avoid the emotional rollercoaster and learn to look at the markets objectively. 

Here we will show you how to master the emotional pitfalls of decision making when it comes to trading, a skill every successful trader has acquired at some point in their journey. Outlined below are several points one can incorporate into their trading practices, whether trading daily or once a month. 

Outline Your Trading Goals

Before you implement any of these strategies into your trading practices, first establish what your trading goals are. Are you looking to make small returns on short term trades, or are you looking to make smart decisions over a long period of time? When it comes to mastering emotional management in trading you will need to ensure that every decision is in the best interests of your ultimate goal.

Black And White

Learn to remove the grey areas when it comes to decision making and view crypto trading in black and white, i.e. trade like a robot. By incorporating a systematic and rule-based approach to trading you can automatically alleviate the grey areas, this might include algorithms and computer-executed trading strategies. 

Red Light, Green Light

Colours play a huge role in our psyche and can often trigger an emotional response. For instance, if you see a big red candle this will likely stir feelings attached to danger, stopping and signs of warning. Don’t fall into the trap of allowing this to trigger you, and the same goes for seeing green candles. Don’t allow these colours to trigger your emotions and make decisions that deviate from your end goal. 

Axiomatic Framework

Solidify a set of rules for your trading practices that provide unquestionable pathways through which you can trade. For example, set up entries, exits, risk limits and stop orders. Also look at establishing rules in advance around when to exit a trade if it moves favourably or unfavourably, and what your risk parameters are. 

If a trade does not entirely meet all the predetermined criteria you established, do not enter a trade. 

Take A Break

If you’re on a bad streak, consider taking a break from trading activities to re-centre. This practice is used by risk managers on trading floors and is referred to as cut-offs. If a trader is experiencing a poor performance streak they will be moved to a demo trading model until they start to perform better, this also might include taking a break completely. 

Self Reflect On Behavioural Shortcomings

Dig deep to find what reactions you make when faced with emotions such as greed or fear. Attempt to learn as much as possible about your behavioural patterns when trading so that once triggered you can learn to recognise these patterns so as not to fall victim to your own emotional responses. 

Balance

Don’t underestimate the power of balance as it plays an imperative role when it comes to clear judgement, reason and logic. When it comes to being a strong athlete, it’s imperative that the athlete needs to be in a good mental space too. The same runs true for being a strong trader, mental (and even physical) strength plays a strong role in overall balance and your ability to function optimally. These positive changes reverberate across all aspects of your life and can certainly have an effect on your trading endeavours.

Master Emotional Management In Trading

Ultimately the most disciplined version of yourself will yield the best results when it comes to trading. Consider improving on all aspects of your life and then implement several strategies listed above and you should be well on your way to an incredibly successful trading path. 
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To learn more about this topic, consider reading “Trading in the Zone” by Mark Douglas and “The Psychology of Trading” by Brett N. Steenbarger.

Let's talk about cryptocurrency payments in plain and simple English: think of crypto as digital money that works over the internet. With more than 420 million people already using it worldwide, and big companies like Microsoft and Starbucks now accepting it as payment - crypto has officially landed in the mainstream. 

Why people love using crypto for payments

It's cheaper to use

Remember the last time you sent money abroad? Those fees probably weren't fun. Crypto usually costs much less to send, whether you're paying someone across the street or across the world.

It's super fast

With regular bank transfers, you might wait days for your money to arrive. With crypto, payments usually go through in minutes. It's like sending an email instead of waiting for a letter in the mail.

It's really safe

Crypto uses a special technology called blockchain that makes it very hard for anyone to cheat or steal. Think of it like a digital safe that keeps getting stronger every time someone uses it.

It works everywhere

Crypto doesn't care about country borders. You can pay anyone, anywhere, anytime. No need to worry about different currencies or bank holidays.

The numbers that matter

More businesses are jumping on board every day. In 2021, people used crypto for over $754 million worth of payments, with this number growing by roughly 17% each year. As more businesses incorporate crypto into their payment systems, they have found more customers making larger checkouts. 

How to pay with crypto (it's easier than you think)

1. Pick crypto at checkout: Just like choosing credit card or PayPal
2. Scan or copy: Use your phone to scan a QR code or copy a payment address
3. Send your payment: Click to send from your digital wallet
4. Wait a minute: Your payment gets confirmed quickly
5. You're done: The store gets their payment, and you get your stuff

Advantages of using crypto

For shoppers:

• Your personal information stays private
• No one can steal your card details
• Payments go through quickly
• Works the same way everywhere in the world

For businesses:

• Get paid faster
• Spend less money on processing fees
• Reach customers everywhere
• No worries about fake payments

Is it hard to start using crypto?

Not at all! If you can use a smartphone app, you can use crypto. Here's what you need:

1. Get a digital wallet (it's like having a banking app)
2. Buy some crypto, Bitcoin is often a good place to start
3. Start paying at places that accept it

Looking to the future

More and more stores and websites are starting to accept crypto every day. It's becoming as normal as using a credit card or mobile payment. Sure, it's new and different, but so was paying with a card instead of cash when that first started. 

Simple tips for using crypto

• Start small until you're comfortable
• Double-check addresses before sending
• Keep your wallet information safe
• Use well-known services and stores

Why this matters

Whether you're a shopper who wants more ways to pay or a business owner looking to reach more customers, crypto payments are worth checking out. They're:

• Fast
• Safe
• Work everywhere
• Usually cheaper than regular payment methods

The bottom line

Cryptocurrency isn't just for tech experts anymore. It's becoming a normal way to pay for things, just like credit cards and digital wallets. While it might seem new and different at first, it's actually pretty simple to use once you try it.

Remember: You don't need to understand all the complex technology behind crypto to use it, just like you don't need to know how a credit card machine works to swipe your card at the store.

Ready to try?

If you're curious about using crypto for payments, start small. Simply download the Tap app from your Tap store (we encourage you to read the reviews and information before engaging in any crypto app - we’re confident you’ll still choose Tap) and create an account. 

You will then need to complete a quick identity verification step (NB no matter which crypto platform you might go with) and once you’re verified you can buy any cryptocurrency you like. If you’re looking to pay with crypto, it is worth noting that Bitcoin is the most widely accepted. 

Then try buying something inexpensive from a well-known store that accepts crypto using the steps above. The process should be as smooth as if you were using your digital card. If you run into any difficulties, we have 24/7 customer support in the app that will gladly help you through. 

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Det här året har vi sett en stadig men märkbar återhämtning på kryptomarknaden efter den kyliga kryptovintern 2022. Faktorer som minskad inflation och en något lugnare makroekonomisk situation har gett kryptovärlden utrymme att vända uppåt och visa gröna siffror igen. Även om vägen tillbaka till 2021 års nivåer kan bli lång, så finns det definitivt hopp i horisonten.

Innan vi dyker djupare, låt oss först kika på tidigare kryptoboostar kopplade till Bitcoin-halveringar. Historiskt sett har prisökningar ofta skett några månader efter en halvering av Bitcoin. Effekten brukar märkas tolv till arton månader efter själva halveringen.

I den här artikeln ligger fokus främst på Bitcoin, eftersom kryptovalutan har en tung position i hela industrin. Bitcoin-trender tenderar att sätta tonen för många andra altcoins, även om det såklart inte är en exakt vetenskap. Men när Bitcoin går in i en haussefas följer ofta andra kryptovalutor med – och samma gäller när priset faller.

Vad är en Bitcoin-halvering?

Satoshi Nakamoto, personen eller gruppen bakom Bitcoin, utgick från tanken att brist på tillgång skapar värde. När Bitcoin designades fastställdes att det aldrig skulle finnas fler än 21 miljoner coins. Dessa kan visserligen delas upp i mindre enheter, men maxgränsen förblir densamma.

För att utnyttja denna knapphet och säkerställa en jämn fördelning av nya coins skapade Nakamoto halveringsmekanismen. Den ser till att Bitcoin förblir en deflationär tillgång, styr hur många nya coins som förs in i omlopp och skapar naturliga svängningar på marknaden.

För att förstå halveringar behöver vi först förstå hur Bitcoins utvinns. Genom ett decentraliserat nätverk samlas nya transaktioner i en så kallad mempool i väntan på bekräftelse. Miners tävlar sedan om att verifiera dem genom att lösa ett avancerat kryptografiskt problem. Den som lyckas först får äran att verifiera transaktionerna – och dessutom ta hem belöningen.

När alla transaktioner är verifierade sammanställs de i ett block som läggs till i blockkedjan i kronologisk ordning. Minern får då både transaktionsavgifter och en blockbelöning som tack för insatsen.

Varje gång 210 000 block skapats, vilket sker ungefär vart fjärde år, halveras blockbelöningen. När Bitcoin lanserades 2009 låg belöningen på 50 BTC per block — idag är den nere på 6,25 BTC. Oavsett marknadspris sker dessa halveringar automatiskt enligt den kod som Bitcoin bygger på, och kan inte ändras.

Tillbakablick på tidigare bull runs

Bitcoins första mini-hausse

Den allra första noterade "bull run" inträffade i april 2011 då Bitcoinpriset ökade med hela 3 000 % på tre månader. Från 1 dollar i april till 32 dollar i juni — men euforin blev kortvarig och priset föll tillbaka till runt 2 dollar i november.

Samma år genomfördes Bitcoins första halvering i november, och priset låg då kring 13–14 dollar.

2012-halveringen / 2013-hausse

Efter halveringen steg priset från 13 till 30 dollar under de första månaderna. I april nådde Bitcoin sitt dåvarande rekord på 100 dollar, vilket skapade nyfikenhet även utanför kryptokretsarna. I november, ett år efter halveringen, bröt Bitcoin 1 000-dollarsgränsen. Men även denna gång blev topparna kortlivade – en månad senare var priset tillbaka runt 530 dollar.

2016-halveringen / 2017-hausse

Nästa halvering skedde i juli 2016 när priset låg runt 600 dollar. Efter några år av volatilitet mellan 100 och 900 dollar klättrade Bitcoin återigen till 1 000 dollar i januari 2017, sex månader efter halveringen.

I maj hade priset dubblats till 2 000 dollar, och i december nådde det nästan 20 000 dollar.

Detta utlöste en riktig Bitcoin-feber. Krypton blev ett hett samtalsämne i mainstreammedia, och marknaden exploderade med nya projekt och så kallade ICO:er (Initial Coin Offerings). Diskussionerna om användaracceptans och reglering tog fart på allvar.

Ett år senare, i december 2018, hade priset rasat till 3 236 dollar. I december 2019 låg det runt 7 200 dollar.

2020-halveringen / 2021-hausse

2020 drabbades världen av pandemin, som skakade globala ekonomier i grunden. Trots detta visade sig kryptoindustrin vara mer motståndskraftig än många andra marknader.

Bitcoin föll nästan 50 % till 4 900 dollar i mars 2020, men återhämtade sig till 9 000 dollar i maj då nästa halvering inträffade. Priset fortsatte stiga till 29 374 dollar i december, en ny toppnotering.

I början av 2021 fördubblades priset till 64 000 dollar i april. Efter en nedgång till cirka 30 000 dollar i juli rusade det återigen till 68 000 dollar i november.

Men 2022 kom osäkerheten tillbaka. Geopolitiska spänningar, inklusive Rysslands invasion av Ukraina, pressade globala priser på bland annat bränsle. Räntorna höjdes till rekordnivåer och fortsatta problem i leveranskedjor skapade nya svårigheter.

När flera kryptonätverk och börser dessutom föll samman, började många dra sig ur marknaden. Bitcoin föll under 20 000 dollar för första gången på två år, och kryptovintern 2022 var ett faktum.

2023 blev heller inte det genombrottsåret som många hade hoppats på, trots en prisökning på cirka 29 % över året.

Är vi på väg mot nästa kryptoboost?

Trots allt har marknadsindikatorer som Bitcoin Fear and Greed Index (vid skrivande stund) visat ett glädjande skifte — från "Extrem rädsla" till ett "Girighet"-läge. Det här är ett positivt tecken jämfört med 2022 och tyder, enligt vissa analyser, på att marknaden befinner sig i en ackumuleringsfas.

Enligt Wyckoffs marknadscykel är detta ett förstadium till den så kallade "mark-up-fasen", vilket brukar signalera slutet på en björnmarknad.

Marknaden för digitala tillgångar är fortfarande volatil och oförutsägbar — ingen kan med säkerhet säga vad som väntar de kommande månaderna eller åren. Men historiskt sett har bull runs ofta följt efter Bitcoin-halveringar, så luta dig tillbaka och håll ögonen öppna. Det kan bli en riktigt spännande resa!

Solana är en högpresterande blockkedja som använder en unik konsensusmekanism för att uppnå både höga transaktionshastigheter och säkerhet. Tack vare sin användarvänliga design används plattformen redan av stora aktörer runt om i världen. Här går vi igenom vad Solana (SOL) är, dess ambitioner, framgångar, och varför det så ofta kallas för en av de största utmanarna till Ethereum.

Sedan Bitcoin introducerades 2009 har ett helt ekosystem av kryptovalutor vuxit fram — värt nära 1,2 biljoner dollar i skrivande stund. Medan Bitcoin skapades som ett alternativt betalningssystem för att lösa problem i det traditionella finanssystemet, har plattformar som Ethereum, och numera Solana, tagit steget längre genom att möjliggöra utvecklingen av hela blockkedjeindustrin med hjälp av programmerbara funktioner.

Vad är Solana (SOL)?

Solana har snabbt seglat upp som en av de mest populära protokollen inom DeFi (decentraliserad finans). Plattformen ger utvecklare möjlighet att bygga decentraliserade applikationer (dApps) och smarta kontrakt — ungefär som Ethereum. Det som gör Solana extra intressant är dock den imponerande transaktionshastigheten och de låga avgifterna.

Bakom projektet står två huvudaktörer: Solana Foundation, en ideell organisation baserad i Schweiz som arbetar med att främja plattformen och skapa internationella samarbeten, och Solana Labs, med säte i San Francisco, som driver den tekniska utvecklingen framåt.

Solana strävar även efter att göra kryptovärlden lite grönare. Plattformen använder nämligen både en Proof-of-Stake-mekanism för att säkra nätverket och en banbrytande innovation kallad Proof-of-History (PoH), framtagen av en av grundarna själv.

PoH fungerar som ett slags tidsstämpel inuti nätverket och gör det möjligt att behandla upp till 65 000 transaktioner per sekund. Som jämförelse hanterar Ethereum ungefär 30 transaktioner i sekunden. Kort sagt hjälper PoH till att hålla koll på tidsflödet i datan — en riktig gamechanger.

Tack vare sin snabbhet har Solana byggt upp ett troget community. Plattformen används av företag inom allt från finans till resor, och intresset för SOL-token, plattformens egna kryptovaluta, är stort.

Nyckelfunktioner hos Solana

Solana har flera starka kort på handen som gör att den sticker ut:

Skalbarhet
Solana kan hantera tusentals transaktioner per sekund tack vare avancerad teknik som parallell bearbetning och så kallade TPUs.

Smarta kontrakt
Plattformen stödjer smarta kontrakt och ger utvecklare friheten att skapa decentraliserade appar.

Konsensus via Proof of Stake (PoS)
Solanas unika PoS-system kombineras med Proof-of-History för snabba transaktioner, effektiv validering och snabba blockbekräftelser.

Decentraliserad finans (DeFi)
Med snabba och prisvärda transaktioner har Solana blivit en favorit inom DeFi-världen — perfekt för utlåning, handel, och mycket mer.

Vem skapade Solana?

Bakom Solana står mjukvaruingenjören Anatoly Yakovenko. Han började utveckla projektet redan 2017 tillsammans med sina tidigare kollegor Greg Fitzgerald och Eric Williams. Med hjälp av sitt team byggde de tillsammans det programmerbara nätverk vi ser idag.

Yakovenko är även hjärnan bakom PoH-protokollet som har gett Solana dess unika skalbarhet och effektivitet. Hans tekniska kunnande har satt ett tydligt avtryck i blockkedjevärlden.

Hur skiljer sig Solana från Ethereum?

En av Solanas huvudambitioner är att förbättra flera av Ethereums tekniska funktioner. Plattformen gör transaktioner betydligt snabbare, samtidigt som den ökar kapaciteten och sänker kostnaderna — något som gjort Solana till ett populärt val för dem som söker effektivitet.

Skalbarhet
Solana har kapacitet att hantera cirka 65 000 transaktioner per sekund idag, och målsättningen är att klara upp till 700 000 när nätverket växer. Jämförelsevis klarar Ethereum omkring 30 TPS.

Det är dessutom en av få plattformar på denna nivå som kan erbjuda sådan kapacitet utan att förlita sig på så kallade "off-chain"-lösningar eller extra lager.

Kostnad
Transaktionskostnaderna på Solana är dessutom betydligt lägre. En genomsnittlig transaktion ligger runt 0,000125 dollar, jämfört med Ethereums cirka 0,0005 dollar vid skrivande stund.

Vad är SOL?

SOL är Solanas egna kryptovaluta som driver nätverket och hjälper till att hålla transaktionskostnaderna nere. SOL fungerar som ett så kallat utility token — det används för att betala transaktionsavgifter på nätverket och för att säkra nätverket via staking.

Eftersom SOL är en proof-of-stake-token innebär det att nätverkets deltagare är med och säkrar systemet genom att låsa sina SOL-tokens. Värdet på SOL påverkas av flera faktorer: projektuppdateringar, marknadsaktivitet, sentiment, och även tokenekonomiska faktorer som inflationstakt, burn rate och hur snabbt ekosystemet växer.

Hur köper man SOL?

Om du är nyfiken på Solana och vill lägga till SOL i din portfölj, så är du i rätt sällskap. Med Tap-appen kan du enkelt köpa, sälja, byta och lagra SOL — både med kryptovaluta och traditionella valutor. På så sätt kan du bli en del av Solanas växande blockkedjeuniversum. Vill du veta mer om hur man handlar Solana? Läs vidare på Tap-webbplatsen.

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The Curve protocol and Curve DAO token form another innovative project to come from the DeFi movement and one that provides a particularly unique and well-designed concept. Improving on functionalities that DeFi platforms like Uniswap and Sushiswap have otherwise neglected, Curve focuses on providing a viable alternative solution to traditional financial platforms in the blockchain industry.  

The Curve Finance platform, launched in January 2020, later released a decentralised autonomous organisation (DAO) alongside the Curve DAO token eight months later. CRV functions as the in-house token of the platform.  

What Is Curve DAO (CRV)?

The Curve platform, formally known as Curve Finance, provides traders with a decentralised exchange on which to swap digital assets. Curve aims to provide minimum price slippage between two tradable crypto assets by focusing on stablecoins or assets of similar value. Through an automated market maker (AMM) and focused smart contracts, the decentralised exchange is able to manage liquidity.  

While the platform can be compared to Uniswap, in reality, it has some key differences and a much higher amount of locked liquidity. The platform and its liquidity providers are more focused on stablecoins and other coins of that nature. CRV tokens fuel the network and are a tradable asset for crypto users.

The Curve DAO provides more decentralised governance to Curve's trading platform. The Curve protocol has grown into a well-respected financial asset within the DeFi ecosystem with its strong DeFi protocol.

Who created the Curve protocol?

The Curve platform was created by a Russian scientist with ample experience in the crypto industry. Michael Egorov both founded the platform and acts as its CEO. He previously co-founded a crypto business focused on building privacy-oriented protocols and infrastructure, NuCypher, in 2015, as well as LoanCoin, a decentralised bank and loans network.

As of August 2020, Egorov holds 71% of the governance tokens after locking up a large amount of CRV tokens in response to yearn.finance’s increasing voting power in the Curve network. In a statement made later, Egorov admitted to “overreacting”.  

How does Curve work?

Launched prior to Uniswap V2, Curve Finance operates similarly to the DeFi platform but has implemented some key differences. The decentralised exchange differentiates itself from the original AMM platform by innovating the liquidity pool trading structure and relevant smart contracts.

The Curve DAO trading platform is managed by a mathematical function called a bonding curve, which is designed to let cryptocurrencies trade for the best possible price amongst each other. Bonding curves are also used by other DeFi trading platforms, like Uniswap.

Due to the Curve DAO platform being primarily focused on stablecoins, its bonding curve is specifically focused on these pegged digital currencies and is able to trade a larger amount of stablecoins with less change in their relative prices in a liquidity pool.

Lending pools

In order for the Curve DAO platform to operate, it requires a group of users who are willing to lock up their cryptocurrencies in order for them to be traded by others. The platform provides a return on their coins plus a portion of the fees from trades when incentivizing liquidity providers.

The platform manages the coins in the liquidity pools by making them more expensive or cheaper, based on their fluctuating amounts, thereby making them more attractive to buyers and sellers using the platform.

On Uniswap, liquidity pools are based strictly on predetermined trading pairs while on Curve DAO the liquidity pools comprise multiple assets. On Curve DAO, entire liquidity pools can also be used as an asset inside another liquidity pool.

How does a trader use the liquidity pools?

Once a trader adds liquidity to a specific pool, through stablecoins or other digital assets, the user will receive a token specific to that pool. 3pool is an example of one of the most popular liquidity pools on the Curve platform.  

While the platform is known to provide trading for stablecoins, it also supports mirrored assets such as renBTC and wBTC. These assets are both built on the Ethereum blockchain and track the price of Bitcoin in a typical derivatives fashion. Since the prices are close in value they can function in the same pool and be traded using the Curve DEX.

What is the Curve DAO token (CRV)?

The CRV token is the utility token and governance token of the Curve DAO platform, providing users with governance rights, an incentive structure for fee payments, as well as providing long-term rewards to liquidity providers. CRV tokens are awarded to users based on their liquidity commitment and length of ownership.  

The Curve DAO token was launched alongside the Curve DAO in August 2020. The maximum supply is 3.03 billion CRV tokens, with 62% of that being distributed to liquidity providers. The rest is allocated between employees (3%), and shareholders (30%), and a small percentage is kept for community reserves (5%). Employee and shareholder allocations work off of a two-year vesting schedule.  

At the time of writing, over 531 million CRV tokens are in circulation, roughly 16% of the total supply.  The market cap at the time was around $365 million, positioning the Curve DAO token network in the top 20 biggest platforms in the DeFi ecosystem.

How can I buy Curve DAO tokens?

If you’d like to buy Curve DAO tokens to include in your crypto portfolio, you can do so easily through the Tap mobile app. Providing a highly secure and equally simple crypto trading platform, users can buy CRV with British Pounds or Euros, or exchange tokens for other cryptocurrencies supported on the platform such as Bitcoin or Ethereum.  

Simply download the app, create an account and follow the steps to get verified through the KYC process. You will then have access to several wallets, and a much simpler crypto trading experience.  

One of the largest and oldest dapps in the DeFi (decentralized finance) space, Compound Finance has built a reliable reputation among traders looking for lending and borrowing services. Compound operates using its native ERC-20 COMP tokens which provide community governance as well as other services.

What is the Compound protocol (COMP)?

Built on the Ethereum blockchain, the Compound protocol provides liquid money markets offering services such as lending and borrowing. Supporting a number of crypto assets, the Compound protocol allows users to deposit crypto into lending pools providing capital for borrowers on the network and allowing them to earn interest in return.

After depositing funds into the lending pool, lenders are issued "cTokens" (cETH, cDAI, cBAT) which represent the deposit made. These tokens can then be traded or transferred within the platform, or redeemed for the original cryptocurrency deposited. This process is conducted by smart contracts and operates entirely automatically with interest rates algorithmically assigned based on the activity in its liquidity pools. 

The Compound protocol also uses the ERC-20 native COMP token which is distributed to traders that utilize the Compound market, i.e. borrowing, withdrawing or repaying the asset. COMP tokens are distributed each time an Ethereum block is mined proportional to the interest collected from each asset. The COMP cryptocurrency grants COMP token holders governance and voting rights.

Following notable investments from the likes of consulting firm Bain Capital Ventures, Andreessen Horowitz, and Polychain, the platform has grown and established a strong reputation within the decentralized finance space and the greater crypto world.

The history of Compound and who created it

Compound was founded in 2017 by Robert Leshner and Geoffrey Hayes, who both previously held high-profile jobs at PostMates, an online food delivery service. Leshner holds the CEO position while Hayes remains the CTO at Compound Labs, Inc, the software development firm behind the Compound protocol. Compound Labs is an open-source software development firm creating cutting-edge tools, products, and services for the innovative DeFi ecosystem.

In 2018, the platform raised $8.2 million from notable venture capital firms Bain Capital Ventures and Andreessen Horowitz. A year later, Compound raised an additional $25 million from many of the same investors along with new ones including Paradigm Capital.

How does Compound work?

The Compound protocol leverages the power of Ethereum smart contracts and cryptocurrency incentives to benefit lenders and borrowers. Lend and borrow services make up the two main use cases for the platform, as outlined below.

Interest rates on Compound are dynamically managed based on the supply and demand of particular crypto assets within the coin pools. The higher the liquidity, the lower the interest rate. Prices are determined by using the Open Price Feed based on Chainlink's oracles which collect the data from numerous exchanges.

In order to use the Compound DeFi protocol to engage in lending or borrowing services, you will need to connect one of the supported crypto wallets. Currently, the app supports MetaMask, Ledger, WalletConnect, and Tally Ho. The interface has been designed to be user-friendly and easy to navigate, perfect for traders new to the space as well as seasoned DeFi participants.

Lending/supplying

The process of lending on the Compound platform is called supplying. Lenders are able to earn interest on their cryptocurrency by depositing cryptocurrencies into the Compound platform. Borrowers are also required to deposit digital assets into the protocol, which can earn interest but cannot be withdrawn for the duration of the borrowing period.

The platform currently supports roughly 20 crypto assets, from Basic Attention Token (BAT) to Wrapped Bitcoin (WBTC), with Ethereum (ETH) and a number of stablecoins (DAI, USDC, and USDT) being the most actively used.

Once users lend assets to the platform, they are issued with ERC-20-based cTokens corresponding to the cryptocurrency deposited (i.e. cETH, cDAI, etc.). These tokens confirm the liquidity providers' deposits and offer a number of other incentives.

Borrowing

After depositing a particular cryptocurrency into the decentralized finance protocol, users are assigned a "borrowing capacity". This is a limit set in USD based on the rate of the crypto asset which is determined by the Open Price Feed. When depositing multiple cryptocurrencies, the borrowing capacity will factor this in.

Users can also borrow cryptocurrencies supported by the protocol based on a coin's collateral ratio. For instance, if DAI has a collateral ratio of 70%, users can borrow DAI up to 70% of the total amount deposited. Typically, collateral ratios are between 60% and 85%.

Similar to the lending process, when borrowing cryptocurrency borrowers are issued cTokens. So when borrowing DAI for instance, borrowers will be issued cDAI tokens, with the interest payable based on these tokens as well.

Withdrawing

After paying back the borrowed debt, users can redeem their deposited funds. Without having to deal with other traders, the protocol seamlessly utilizes a dynamically maintained set of liquidity pools. The platform also does not charge any withdrawal penalties or hold users to minimum investment times.

When users redeem their funds, the cTokens issued are added to the accumulated interest and converted back to the originally deposited cryptocurrency. These funds can then be withdrawn into the connected wallet.

Account Health

The Compound platform uses a system called "account health" to establish whether accounts are in risk of liquidation. This system measures the sum of the deposited funds against the total amount borrowed. If a user's account health falls dangerously low, the account could be liquidated, and some of the collateral forfeited.

This process is managed in a decentralized way where platform users act as liquidators and monitor for risky accounts. Should they liquidate an account they earn a portion of the liquidated funds.

What is the COMP token?

The COMP token is the Compound platform's native token which mainly serves as a governance token, with a built-in incentive for users holding the token. Holders of COMP tokens are able to vote on all important decisions pertaining to the protocol, including interest rates. Much like the cTokens, COMP tokens are based on Ethereum’s ERC-20 token standard. 

Compound tokens have a total supply of 10,000,000 tokens, of which over 70% of Compound coins are in circulation (at the time of writing).

How can I buy COMP tokens?

With Tap's mobile app, users can easily acquire COMP tokens and store them in the integrated wallet with confidence, either to hold long-term, sell, trade or use on other DeFi platforms. Not only does Tap provide an effortless way of trading digital assets, but also a safe space to keep your investments secure over long periods of time.

In order to access the mobile app users will need to download the app and create an account. After a quick verification process, users have access to a wide range of vetted cryptocurrencies as well as fiat wallets where funds can be safely stored or used in the real world. Whether you're looking to buy Compound or sell Compound coins, Tap provides a seamless solution to your crypto needs.