COMP Risk

COMPOUND (COMP)
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DESCRIPTION

Compound (COMP) is a decentralized finance (DeFi) protocol built on the Ethereum blockchain that enables users to lend, borrow, and earn interest on their cryptocurrency assets. Launched in 2018 by Robert Leshner and Geoff Hayes, Compound aims to provide an efficient and transparent platform for decentralized lending and borrowing. The protocol operates through smart contracts, allowing users to interact directly with the platform without the need for intermediaries.

One of the unique features of Compound is its algorithmic interest rate model. Interest rates for borrowing and lending on the platform are dynamically adjusted based on supply and demand, ensuring efficient allocation of capital and encouraging participation. Users can deposit their assets into lending pools and earn interest on their holdings, while others can borrow these assets by providing collateral.

COMP is the native governance token of the Compound protocol. It empowers holders to participate in the governance and decision-making processes of the platform, including proposing and voting on changes to the protocol. Additionally, COMP token holders can also earn rewards by supplying liquidity to the platform.

Compound (COMP) Whitepaper: https://compound.finance/documents/Compound.Whitepaper.pdf
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RISKS OF COMP

Any investment in cryptocurrency and digital assets, such as COMP, can include the following general risks:(i) volatility risk and liquidity risk(ii) short history risk(iii) demand risk(iv) forking risk(v) code defect risk(vi) regulatory risk(vii) electronic trading risk(viii) cyber security risk

For additional information of risks associated with cryptocurrency and digital assets, you may refer to the Satstreet Inc Services Risk Statement. In terms of specific risks, as COMP is one of the longest-standing crypto assets and its community base is widely decentralized, there is no central working group or authority to disclose material information to the public regarding COMP. Please note that these risks and the associated summaries or overviews provided for each herein are not intended to be a complete overview of all such risks and, in addition, there may be other risks that come with exposure to COMP. We encourage all users to perform their own due diligence to assess the risks associated with COMP and to determine whether this level of risk is acceptable to them. Neither COMP nor Satstreet guarantees the value of COMP, and holders of COMP will not have any recourse to COMP or Satstreet if the value of COMP declines for any reason whatsoever.

SATSTREET EVALUATION OF COMP

Satstreet Inc. has reviewed and assessed COMP prior to making it available through our services and has concluded that COMP is not a security or derivative under Canadian securities legislation; however, there is a risk that this conclusion could change in the future and that, in such event, Satstreet will be required to halt, suspend, and then remove COMP from its platform as described in the Satstreet Inc. Services Risk Statement.

Further, as indicated above, no Canadian securities regulatory authority has expressed an opinion about COMP, including an opinion that COMP is not itself a security and/or derivative. Based on publicly available information Satstreet has reviewed COMP, including, but not limited to, a review of the following: The creation, governance, usage, and design of COMP, including the source code, security, and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that created COMP. The supply, demand, maturity, utility, and liquidity of COMP. Material technical risks associated with COMP, including any code defects, security breaches and other threats concerning COMP and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them. Legal and regulatory risks associated with COMP, including (i) any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of COMP, and (ii) statements made by any securities regulatory authorities in Canada, other regulators in IOSCO-member jurisdictions, or the regulator with the most significant connection to COMP about whether COMP, or generally about whether the type of crypto asset, is a security and/or derivative.

Last Updated: June 2023

Risk Statements

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