A compensation circuit of IR drop of a display system, the display system having m pixel circuits, the compensation circuit comprising: m current comparators composed of TFT devices, wherein each current comparator is configured to compare the input current signal with a reference current signal and output a voltage signal according to the comparison result; m encoders composed of TFT devices, wherein each encoder is configured to encode the voltage signal into a digital voltage signal to output; a controller which is configured to calculate a difference value between the digital voltage signal and an ideal digital voltage signal and generate a digital difference signal; m compensation voltage generators each of which is configured to convert the digital difference signal into a compensation voltage signal, and write the compensation voltage signal into a corresponding pixel circuit according to control of a timing control signal; and a driver IC.