On 15 June 2020 Compound began distributing COMP to users of its Ethereum lending markets after governance Proposal 007 executed. About 2,880 COMP per day leave a reservoir, allocated across markets in proportion to interest accrued, then split 50/50 between suppliers and borrowers. Uniswap listed a COMP–ETH pool the same day. Robert Leshner’s firm had framed this as the last step in handing the protocol to token holders. The useful fact for readers is simpler: using the app now prints a second token.
This page is the dated peg for “DeFi summer”. We are not writing a second overlapping explainer about TVL charts. Later copycats (other farms, other ticks) are later.
What happened
If borrowers earn the same governance token as lenders, it can pay to borrow an asset you do not need, farm COMP, and sell it — as long as the token’s price covers the interest and the gas. USDT markets on Compound ballooned in the first week because the reward followed interest. That is not magic. It is an incentive pointed at a contract. Liquidations, oracle prints, and irreversible approvals are still there when the farm is less fashionable.
Why it matters
Yield on a screen is usually someone else’s risk plus a token emission. “Governance” that you sell on Uniswap the same afternoon is a coupon, not a board seat you will use. See stablecoins: useful, not magic if the thing you supplied was a dollar token. See how crypto wallets actually work before you approve a spender you cannot name.
What happens next
More farms, more TVL screenshots, and a lot of people who will describe a failed transaction as “the blockchain stole it”. We will not rank farms. Nothing here is an instruction to supply, borrow, buy, or sell COMP.
