What are the risks associated with Compound?
The risks associated with Compound are similar to those associated with any other cryptocurrency project.
These include: 1. Regulatory Risk: As with any cryptocurrency project, there is always the risk that governments or regulatory bodies may impose restrictions or regulations on the project, which could have a negative impact on its success. 2.
Security Risk: Compound is built on Ethereum, which is an open-source platform and therefore vulnerable to malicious attacks. This means that there is a risk of funds being stolen or lost due to security breaches. 3.
Market Risk: The cryptocurrency market is highly volatile and unpredictable, meaning that the value of Compound tokens can go up or down quickly and without warning. This means that investors may not be able to recoup their investments if the market turns against them. 4.
Liquidity Risk: Compound tokens are not widely traded yet, meaning that it may be difficult for investors to sell their tokens quickly if they need to do so in order to recoup their investments.
