Key Features
Here are the main features that make Compound stand out:
Algorithmic interest rates – Automatically adjusted by supply and demand
Decentralized lending – Permissionless borrowing and lending
cTokens system – Represents user deposits
Transparent markets – Fully on-chain money markets
a. Technology / Architecture
Compound uses Ethereum smart contracts to create autonomous lending markets. Interest rates adjust algorithmically based on supply and demand. Funds remain in transparent pools.
b. How Users Interact With It
Users deposit crypto to earn interest or borrow against collateral. No negotiation or approval is required. Everything operates on-chain.
c. Core System / Model
DeFi lending model – Algorithmic interest markets.
Who is Project for?
• DeFi lenders and borrowers
• Long-term yield seekers
• Developers integrating lending protocols
• Advanced crypto users
Comparison with Similar Project
• Aave vs Compound – Aave provides more advanced tools, while Compound emphasizes simplicity.
• MakerDAO vs Compound – MakerDAO issues stablecoins, while Compound focuses on lending markets.
How to use the Project?
• Step 1 – Create a Web3 wallet
• Step 2 – Deposit supported crypto assets
• Step 3 – Earn interest or borrow
• Step 4 – Monitor collateral ratios
Summary
Compound is a decentralized lending protocol. It allows users to earn interest or borrow crypto assets. It matters because it automates interest rates through code. It benefits DeFi users and protocol builders.
Safety Tips
• Monitor interest rate changes
• Understand liquidation and collateral risks
• Use conservative borrowing strategies
• Avoid unsupported asset markets
• Review governance proposals carefully