A cToken is a lending token developed specifically for the Compound platform. When users use the Compound protocol to deposit cryptocurrency, they receive cTokens that represent the initial deposit plus accrued interest. Lending DAI to Compound, for example, provides the lender with cDAI, which automatically earns interest for the cDAI holder. cDAI can be returned to Compound at any time in exchange for the original DAI plus the accumulated interest.
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