Compound Language

Some terms used in the context of the Compound protocol, and how Swivel utilizes it.

Compound Language

Some terms used in the context of the Compound protocol, and how Swivel utilizes it.

Compound Token

A CErc20 at an address passed to the constructor of the Swivel contract at deployment.

Pass an array of underlying token addresses + array of CERC20 addresses to create a public mapping of address -> address

Mint

When an agreement is initiated and after funds have been sent to the Swivel contract, cTokens are minted on the Compound protocol to generate interest.

The number of cTokens minted is calculated in terms of the underlying token consumed/transferred rather than the # of cTokens to be minted.

Redeem

When an agreement has completed and "Release" is called, cTokens are redeemed on the Compound protocol to return an agreement's underlying deposit as well as the interest generated over the agreement's lending term.

The number of cTokens redeemed is calculated in terms of the underlying token to be returned, rather than the # of cTokens to be consumed/transferred.

Exchange Rate

Exchange Rate refers to the 2e26+ uint returned from the Compound Protocol by exchangeRateCurrent().

In order to calculate the interest generated by an agreement, the current ratio of underlying:cToken is stored in each agreement upon its initiation(exchangeRateCurrent()).

Over time this ratio increases such that when "Release" is called, the difference between stored / current exchange rate can directly calculate the yield an agreement has realized.

CToken is Erc20

Note that all functionality of the Erc20 standard is available to the Compound Token. Use CErc20 or cToken to specify.