Compound
Lending protocol where each Compound III market lends one base asset, such as USDC, against crypto collateral.
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Compound key facts
| Category | Lending protocol |
|---|---|
| Chains | Ethereum and other EVM networks |
| Platforms | Web |
| Custody | Non-custodial |
| Security audits | OpenZeppelin, ChainSecurity |
| Token | COMP (governance) |
| US availability | Available: terms restrict only sanctioned jurisdictions |
| Fees | Borrowers pay interest from governance-set rate models; liquidation returns collateral minus a penalty |
COMP token
- Price
- $20.4 +3.1% 24h
- Market cap
- $204.1M
- Fully diluted value
- $204.1M
- 30-day change
- -18.3%
Market data: CoinGecko, updated Nov 9, 2026. Educational content, not financial advice.
What is Compound?
Compound is a lending protocol on EVM networks. In Compound III, each market has one base asset that users borrow against supplied collateral; the first deployment was on Ethereum with USDC as the base asset. The protocol has been audited by OpenZeppelin and ChainSecurity, and COMP holders choose the pause guardian.
How Compound works
Each Compound III market, also called a Comet, sits behind one proxy address such as cUSDCv3, and that proxy is the only contract you should interact with.
You add collateral with the supply function and borrow the base asset with withdraw. Borrowing capacity comes from each asset's borrowCollateralFactor: the docs use WBTC at 85% as an example, which lets an account borrow up to 85% of its supplied WBTC's USD value. Each collateral asset also has a supplyCap, and collateral you post earns no interest.
Supply and borrow rates come from two separate models set by governance. Both depend on utilization of the base asset and include a kink, above which the rate climbs faster. Interest accrues every second using the block timestamp. Base balances are signed integers: a positive balance means you supply the base asset and earn the supply rate, a negative one means you borrow it and pay the borrow rate.
Liquidation uses a liquidation collateral factor that is set higher than the borrow factor, which leaves a price buffer on new positions. Once an account crosses it, any address can call absorb. The protocol takes the collateral, repays the debt from its own reserves and credits the user the collateral value minus a liquidationFactor penalty, paid in the base asset. When reserves drop below a governance target, anyone can buy the seized collateral at a discount through buyCollateral.
How to start with Compound
- Before your first deposit, the token needs an ERC-20 approve transaction that lets the Comet contract move it, so the first supply takes two transactions.
- Each market sets a minimum borrow size, baseBorrowMin, and a borrow that would leave you below it reverts.
- Interfaces can use the Bulker contract to combine steps, such as wrapping ETH to WETH, supplying WETH and WBTC as collateral and borrowing USDC, into a single transaction.
- Contract addresses for every network live in the deployments folder of the Comet repository.
Compound fees and limits
Your cost as a borrower is the borrow rate on your negative base balance, which moves with utilization, plus gas on each transaction. If you are liquidated, you lose the liquidationFactor penalty on the absorbed collateral. Suppliers of the base asset earn the separate supply rate, while collateral assets earn nothing, so posting collateral has an opportunity cost.
Risks to know before using Compound
- Compound III is upgradeable.
- The cUSDCv3 proxy is an OpenZeppelin TransparentUpgradeableProxy, and the Timelock controlled by COMP governance can change parameters through the Configurator and point the proxy to a newly deployed implementation.
- A pause guardian chosen by COMP holders can pause supply, transfer, withdraw, absorb and buy collateral.
- On networks other than Ethereum, proposals arrive through a Bridge Receiver and a local Timelock that adds its own delay.
- The docs list audits by OpenZeppelin and ChainSecurity and a bug bounty for undisclosed vulnerabilities, and they ask users to judge security and suitability themselves.
Compound usage
From DefiLlama (TVL) (fees users paid), updated Nov 9, 2026.
Compound alternatives
Other projects people compare with Compound.
Solana DeFi protocol for lending, borrowing, leveraged yield and automated liquidity vaults.
Onchain asset manager that lends to institutions and offers the syrupUSDC and syrupUSDT yield tokens.
Open lending network of isolated markets and curated vaults that route deposits into them.
Lending and borrowing protocol on Solana, formerly Solend.
Lending and savings protocol in the Sky ecosystem: SparkLend borrowing and Spark Savings for USDS and USDC.
Non-custodial lending protocol where users supply crypto to earn interest and borrow against collateral.
Where Compound ranks on DappAtlas
Listed next to Compound
- Uniswap Decentralized exchange
- Lido Liquid staking
- Curve Finance Decentralized exchange
- CoW Swap DEX aggregator
- Pendle Yield platform
- EigenLayer Restaking
Compound pros and cons
- Audited by OpenZeppelin and ChainSecurity
- One base asset per market keeps each market simple to read
- COMP holders govern parameters and the pause guardian
- Each Compound III market lends only its single base asset
- Pause guardian can halt supply, transfer and withdraw
- Fewer assets to borrow than multi-asset pools
Compound FAQ
What is Compound?
Compound is a lending protocol on EVM networks. In Compound III, each market has one base asset that users borrow against supplied collateral; the first deployment was on Ethereum with USDC as the base asset. The protocol has been audited by OpenZeppelin and ChainSecurity, and COMP holders choose the pause guardian.
How much value is locked in Compound?
$1.3B according to DefiLlama on Nov 9, 2026. It is deployed on 10 chains: Ethereum, Arbitrum, Base, Optimism, Polygon, Mantle and others.
How much does Compound cost?
Borrowers pay interest from governance-set rate models; liquidation returns collateral minus a penalty, according to Compound’s own page (checked Oct 1, 2026).
How much do users pay Compound in fees?
$2.8M over the last 30 days, according to DefiLlama on Nov 9, 2026.
Does Compound have a token?
Yes, COMP. Its market cap was $204.1M on CoinGecko on Nov 9, 2026. Educational content, not financial advice.
Is Compound available in the US?
Available: terms restrict only sanctioned jurisdictions, according to Compound’s own page (checked Sep 26, 2026).
Does Compound hold my funds?
No. Compound is non-custodial: you keep your funds in your own wallet and sign each transaction.
Sources
How this page works
Sources: Compound: official site, Compound: Docs, Security, Compound: Docs, Governance. Data as of Oct 1, 2026.
Not affiliated with any project listed. Educational content, not financial advice.