Compound Finance
A decentralized, non-custodial lending protocol on Ethereum — supply crypto assets to earn yield or borrow against your holdings at algorithmically set rates.
Open DashboardWhy Compound Finance
Most lending platforms ask you to trust a company. Compound Finance's protocol asks you to trust code — code that has been running without interruption since 2018. That difference matters.
Non-custodial by design
Your assets stay under your wallet's control at all times. No account registration, no identity checks, no withdrawal limits imposed by a third party.
Transparent rates
Every interest rate is computed on-chain from a public utilization formula. You can verify the exact APR before and after any transaction, right on Etherscan.
Community governance
COMP token holders vote on every material protocol change. Risk parameters, new collateral assets, and contract upgrades all go through the same on-chain process.
Multi-network reach
The Compound Finance platform runs on Ethereum mainnet, Base, Arbitrum, Optimism, Polygon, and Scroll — six networks as of the latest deployment cycle.
How it works
The mechanics are straightforward. Compound III — also called Comet — uses a single-base-asset model per market. USDC is the primary borrowable asset on most deployments.
Connect your wallet
MetaMask, Coinbase Wallet, WalletConnect, Ledger, and Ronin are all supported. No email required.
Supply collateral or base asset
Deposit ETH, WBTC, LINK, wstETH, weETH, or cbBTC as collateral. Alternatively, supply USDC directly to earn the base supply APR.
Borrow up to your capacity
Each collateral asset carries a collateral factor — for ETH that is 83% on mainnet. You can borrow USDC up to that threshold. Monitor your liquidation point in the dashboard.
Earn COMP rewards automatically
Both suppliers and borrowers can accrue COMP incentives on active markets. Rewards are claimable at any time without closing your position.
Repay and withdraw at any time
There are no fixed loan durations. Repay partial or full balances whenever you want, then withdraw collateral once your borrow balance clears.
Key features
Comet architecture (v3)
Compound III replaces the multi-asset pool of v2 with isolated base-asset markets. This reduces systemic risk and simplifies the interest rate model considerably.
Algorithmic interest rates
Rates adjust continuously based on utilization. No oracle is required to set a price — supply and demand alone determine what borrowers pay. See the Ethereum DeFi documentation for background on the model.
On-chain governance
COMP holders submit and vote on Governance Improvement Proposals (GIPs). Timelock contracts enforce a 48-hour delay before any approved change takes effect.
Extensions (Bulker, Migrator)
The Extensions tab in the dashboard hosts third-party integrations including a collateral swap tool, a v2-to-v3 migrator, and DeFi Saver's automation — all permissionlessly built on the Compound Finance protocol.
Multi-chain deployments
Each chain hosts an independent Comet instance. Parameters, collateral lists, and reward rates differ across networks. Check the questions page for a breakdown by network.
Open-source contracts
All smart contracts are public. Developers can read the full source code, audit history, and deployment addresses in the Comet GitHub repository.
Position summary dashboard
A single screen shows collateral value, liquidation point, borrow capacity, and available-to-borrow — with real-time oracle prices for every supported asset.
Compound Finance by the numbers
These figures reflect historical protocol activity. On-chain data is always the authoritative source — the dashboard updates in real time. Learn more about decentralized finance on Wikipedia.
FAQ
Quick answers to the most common questions. For deeper technical detail, visit the full questions page or read about the team behind Compound Finance.
What is Compound Finance?
Compound Finance is an open-source, autonomous lending protocol built on the Ethereum blockchain that allows users to supply crypto assets to earn interest or borrow against their holdings. It has been live since 2018 and has processed billions in loan volume.
How do I start earning interest on Compound Finance?
Connect a compatible wallet, select the asset you want to supply — USDC, ETH, or WBTC are common choices — enter an amount, and confirm the transaction. Interest begins accruing per Ethereum block immediately after confirmation.
Is Compound Finance safe and audited?
Compound Finance's smart contracts have been audited by multiple independent security firms. The protocol has operated continuously since 2018 and all code is open-source on GitHub. That said, smart contract risk is never zero — only deploy capital you are prepared to manage actively.
What is the COMP token?
COMP is Compound Finance's governance token. Holders can propose and vote on protocol changes, including interest rate model parameters, newly supported collateral assets, and treasury decisions. One COMP equals one vote.
Can I borrow on Compound Finance if I do not have USDC?
Yes. Supply other supported collateral assets such as ETH, WBTC, or LINK, then borrow USDC against that collateral up to the allowed borrow capacity. The exact amount depends on each asset's collateral factor — ETH carries an 83% factor on mainnet.
How does Compound Finance calculate interest rates?
Interest rates on the Compound Finance platform are determined algorithmically based on the utilization ratio of each asset pool. When utilization is high — most of the supplied USDC is borrowed — rates increase to attract new suppliers. Lower utilization pulls rates back down automatically.
Why should I use Compound Finance instead of a centralized lender?
The protocol is non-custodial. You retain control of your assets at all times through your own wallet. There is no counterparty risk from a centralized company going insolvent, and all interest rates and positions are publicly verifiable on-chain.
What collateral assets does Compound Finance accept?
In the Compound III architecture, supported collateral on Ethereum mainnet includes ETH, WBTC, LINK, UNI, cbBTC, wstETH, weETH, rsETH, tBTC, USDe, sdeUSD, and deUSD. Each has its own collateral factor and liquidation threshold set by governance.
How do I participate in Compound Finance governance?
Acquire COMP tokens from a supported exchange or earn them through the protocol. Delegate your voting power to yourself or another address, then use the governance portal to review active proposals and cast votes. Proposals require a minimum COMP threshold to be submitted.
What happens if my position gets liquidated on Compound Finance?
If your borrow balance exceeds your liquidation point — calculated from the liquidation factor of each collateral asset — third-party liquidators can repay a portion of your debt in exchange for your collateral at a discount. Keeping a healthy buffer between your borrow balance and capacity is the main way to avoid this.
Can I use Compound Finance on networks other than Ethereum?
Compound Finance III has deployed markets on Ethereum mainnet, Polygon, Base, Arbitrum, Optimism, and Scroll. Each chain hosts its own independent Comet contract with separate parameters, supported assets, and reward rates. It is worth noting that while Solana is a major DeFi ecosystem, Compound Finance does not currently deploy on Solana — the protocol is EVM-focused.