How to Buy Compound (COMP) in 3 Simple Steps

5 Things to Consider if You Want to Buy Compound

If you plan to buy COMP and get into trading, investing, and lending—you should keep a few things in mind. We have created a shortlist of some of the most important things to keep in mind while buying Compound.

1. Carefully choose your preferred secure payment method

This one is pretty self-explanatory. In order to get into crypto, you will have to provide a small, initial investment that will get you started. But, you should carefully choose which method you will use.

Depending on where you live in the world, you may have one, two, three, or more options. If you happen to have more than one, you should compare them as they likely offer the ability to transfer money at different speeds and also at different costs. So, keep that in mind.

2. Will you need to set up your own wallet?

Depending on your approach to crypto, you may or may not need to set up a cryptocurrency wallet. For example, if you don’t plan on working with crypto directly, but would rather bet on its price movement through CFDs (Contract For Differences), then you’re good to go, no wallets needed.

If, on the other hand, you plan to buy coins, or HODL them, then it is not a good idea to leave them in your exchange wallet after purchase.

Exchanges have multiple weak points that hackers may exploit to break in and steal crypto, and while the exchange will likely compensate you for your loss, there is no way of knowing how, when, or even if it will happen.

It is better to set up a secure wallet of your own, get your coins into it, and keep them safe there.

3. Comparing costs

Next, remember to check out what the costs are like for making transactions in the Compound ecosystem.

While each cryptocurrency has a different cost, all but the largest ones, like Bitcoin and Ethereum, are extremely cheap, often costing only a few cents, sometimes less.

Regardless of what the cost is, we can guarantee that it will be lower than any transaction involving fiat currencies, which on its own makes using crypto worth it.

4. Safety and security

Safety is the top priority in the cryptocurrency world. However, one good thing is that every crypto is off to a pretty good start in this regard, given that all cryptocurrencies are built on the blockchain.

The decentralisation aspect makes the crypto sector extremely safe, as long as you know what you are doing when you store them in a wallet and don’t make a weak and obvious password.

Furthermore, brokers and exchanges should be safe as well, and they are, in most cases. They use various cryptographic security protocols, such as 2FA, MT4, MT5, and alike, to give their users additional security features.

5. Can you understand and navigate the platform?

Another thing to note is whether or not you can understand and navigate the platform of your coin of choice? Users need to make sure that they fully understand the platform they are using before they invest their money because the crypto industry is risky.

If you try to make a transaction and you do something wrong, you might lose your money irreversibly.

What is the Best Payment Method for Buying Compound?

The most difficult part of buying crypto is deciding whether or not to do it, as well as which coin to go for. Once you make these two decisions, actual purchasing is quite simple. There are numerous methods to buy crypto and these are explained below.

Buying Compound with Credit/Debit cards

The easiest and quickest method to buy cryptocurrencies these days is via credit card. If you have ever bought anything with a card, you will easily be able to connect it to your crypto exchange or broker, send some money, and use it for buying cryptocurrencies in no time.

However, note that this will probably also be the most expensive way to buy Compound, as cards charge some of the highest fees in exchange for such fast payments.

Buying Compound with bank transfers

Bank transfers are another way to buy crypto with fiat, and unlike the cards, they are significantly less expensive.

However, this lesser cost also means that you will have to wait sometime before your money arrives, likely a few working days. So, if you are not in a hurry and you don’t have a lot of money to use for trading, this might be an ideal solution for you.

Buying Compound with PayPal

As some may know, PayPal opened its doors to crypto some eight months ago, and the amount of money it generated through fees exceeded even its most optimistic expectations.

However, while PayPal offers the ability to buy crypto on its platform, it doesn’t list COMP as of yet, and so the only way to use it is to go to a P2P platform, find a trader who offers Compound, and then make a deal with them.

Buying Compound with another cryptocurrency

If you already own another cryptocurrency like Ethereum or another altcoin, you can simply go to one of many decentralised exchanges or even to brokers, and use your existing crypto to obtain some COMP coins.

This is also a very simple way, and probably the fastest and cheapest method of doing it. It is as fast as credit cards, and cheaper than bank transfers, so if you can do it, this is probably the best option.

Buying Compound with Cash

Lastly, another option to get your hands-on Compound is to buy it in exchange for cash, whether directly from another COMP holder or on crypto ATMs. But, if you can’t find an ATM that offers COMP, you can use cash to buy Ethereum, and then exchange it for COMP as explained in the previous step.

What Fees Are Involved in Buying Compound?

As you may know, most crypto purchases come with some sort of a fee. For example, money deposits to exchanges and brokers are usually without fees, but there are trading fees that you need to pay during the trade.

On top of that, there are fees for the miners themselves that you have to pay whenever you make a transaction. And, depending on the platform you choose, there may also be withdrawal fees. It all depends on which platform or broker you use, so make sure that you are aware of the costs before committing to using any single platform.

Processing Fees

When you buy COMP with a payment method other than crypto, expect processing fees to arise. If you adhere to crypto payment only, you will incur just the network fees.

Network Fees

Each cryptocurrency blockchain charges some fee to authenticate transfers, deposits, or withdrawals. No two cryptocurrencies have the same fee structure, but they are mostly fractions apart in most cases.

Transaction Fees

Different platforms have their fee structure. While fees might be waived for a certain class of users depending on their tier, others have a flat fee structure that applies to all customers.

Safely storing your Compound

We noted several times already that storing your coins safely typically involves using a crypto wallet. However, here, you once again have several choices, as there are different types of wallets. Each one comes with its own level of convenience and risk, so you need to think things through and make sure that you will make a good choice here.

Web Wallet

Web wallets are also known as hot wallets or online wallets. The name is pretty self-explanatory. These are the wallets that exist on the internet, typically in the form of a browser extension, and storing coins inside is easy and they can be accessed readily at any time. But, by being constantly online, they are also the least safe, as they might get hacked.

Mobile Wallet

A mobile wallet is a wallet that you can use on your smartphone in the form of an app. These are among the most practical, as you can easily connect your phone to the internet at any time.

Desktop Wallet

Desktop wallets are wallets that you can use on your computer. You simply download them and install them, and you can manage your funds from there. Similar to mobile wallets, they can be perfectly safe if you disconnect your computer from the internet.

Hardware Wallet

Hardware wallets are the least practical, but also the safest wallets out there. They are known as cold wallets, and they come in the form of a USB-like device that you can carry around with you.

They don’t have a connection to the internet apart from the moments when you plug them into your computer. This makes them the safest, but also the least convenient, as you can’t easily access the market unless you have a trusted computer next to you.

Also, unlike others, you will have to pay for the actual device.

Wallet Combinations

Lastly, for an extra security measure, you can also combine some of the mentioned types of wallets, which increases the convenience and safety of using them and managing your coins.

What other Coins Can I Trade or Use to Buy Compound?

As a DeFi protocol, Compound is most commonly found on DEXes, where it is paired against a variety of DeFi tokens. You will definitely find it paired against Ethereum, so ETH might be your go-to coin for accessing this, as well as any other ERC20-based token. Other than that, it depends on the exchange you are using but since it is a popular token, it is paired against most of the top ten cryptos.

What’s the Smallest and Largest Amount of Compound I can Buy?

You might be wondering how much COMP you can buy in a single transaction, or what’s the minimum purchase for Compound. The fact is that this depends on the platform you are using.

Some platforms have a certain minimum when buying tokens, and you can’t buy below that, but others let you buy Compound without limit. However, certain jurisdictions may impose a limit on the maximum transaction in a year so check your local laws before investing.

Can I Buy Compound Anonymously with No ID? Is it Safe and Legal to Buy Compound?

Since Compound can be bought on DEXes, you can easily purchase it without revealing your identity. You will only have to provide an ID or some other document if you try to register with a broker in order to use their services, or with a centralised exchange.

DEXes do not require you to upload your ID or anything like that. This is a great way to maintain your anonymity, although this might not remain the case forever. You could also purchase it anonymously on some unregulated exchanges but it is not a recommended method as it could expose you to fraud.

Will Buying Compound Make Me Money?

Compound is one of the biggest DeFi protocols right now, and it allows users to earn money by lending money. Essentially, you will offer your coins to someone else, who will then pay you back, with interest.

This is a good way to keep piling up your COMP supply without having to buy coins. Then, as time goes by and you wait a few years, you will not only have a huge supply of COMP tokens, but their price might be significantly higher than when you bought them, as well. However, this will require patience, so prepare for that.

How to spend your Compound?

Unfortunately, we doubt that you will find a merchant who accepts COMP payments, but that doesn’t mean that you can’t spend your coins in some other way. Let’s say that you have a sizable supply and you want to use them instead of lending them further. You can simply buy another coin like Bitcoin, and then either spend those coins, cash out and spend cash, or invest in a more dynamic project.

How to Sell your Compound?

Just like buying it, selling COMP is rather easy. All you need to do is go to an exchange, transfer your coins from your wallet and enter a sell order. Enter the amount you wish to trade away, and note that they are for sale. After that, all there is to do is wait, but someone will likely jump on the opportunity to buy COMP from you sooner, rather than later.

If you use CFDs, then the process is simple and all you need to do is close the CFD trade as no wallet transfer is required here.