What is Compound (COMP)?
Compound is one of the leading DeFi protocols, with over $1B in value locked as of 2024. Compound is a decentralized crypto lending protocol that lets users earn interest on deposits and borrow digital assets against their crypto. In this guide, you'll learn how Compound works, what makes the COMP token valuable, how to start earning or borrowing, and what security measures protect your funds. We'll also cover market stats, common yields, and show how OKX makes accessing Compound simple and secure. Whether you're just starting with DeFi or looking for a reliable way to earn, this comprehensive guide explains everything you need to know about Compound and COMP.
What is Compound?
Compound is a decentralized finance (DeFi) protocol that enables users to lend and borrow crypto assets without intermediaries. As one of the earliest and most significant players in the DeFi space, Compound helps users earn passive income on their digital assets with automated, transparent interest rates.
Operating as an open-source platform, Compound allows anyone to supply assets to liquidity pools and, in return, receive interest plus a special token called cTokens. Borrowers can then use their own crypto as collateral to borrow other coins from these pools, paying variable interest rates set by supply and demand.
The Compound protocol revolutionized crypto lending by removing gatekeepers and offering real-time, over-collateralized loans. Today, Compound is a pillar of the broader DeFi ecosystem and is integrated with major platforms—including OKX—making it more accessible globally.
How Does Compound Work?
When you supply a supported crypto asset to Compound, you receive an equivalent amount of cTokens (like cETH or cUSDC). These represent your deposit and accrue interest automatically, reflecting your growing balance. To borrow, you deposit collateral, then borrow up to a percentage of its value in another supported asset—paying interest on what you borrow.
Interest rates for both lending and borrowing adjust dynamically based on the current demand and supply for each asset, keeping the system stable and attractive for all participants.
Key Features
- Automated Interest Rates: Returns and borrowing costs update algorithmically in real time.
- Fully Decentralized: Smart contracts run the protocol with no central operator.
- Open Protocol: Anyone can supply, borrow, or build new apps using Compound’s code.
- Wide Asset Support: Major coins like ETH, USDC, DAI, and more are available for lending and borrowing.
💡 Pro Tip: Access Compound from integrated platforms like OKX to simplify earning and minimize operational risk.
Compound (COMP) Token and Governance
The COMP token is the governance and utility token at the core of the Compound protocol. Holders of COMP can influence protocol decisions through voting, helping shape everything from supported assets to system upgrades.
COMP is distributed to both suppliers and borrowers, incentivizing community participation. Every day, new COMP tokens are released in proportion to user activity, promoting decentralized ownership and protocol improvement.
Owning COMP allows users to propose and vote on governance actions, making the protocol community-driven and adaptable to changing needs.
How to Participate in Governance
To join Compound governance, hold COMP and either vote directly on proposals or delegate your voting power to someone you trust. COMP holders can suggest protocol upgrades, add assets, or adjust risk parameters, ensuring Decentralized Finance remains collaborative and innovative.
💡 Pro Tip: You can earn or purchase COMP directly on OKX for immediate governance participation.
Compound Price, Supply, and Market Statistics
The value of COMP and overall Compound protocol stats change in real time, reflecting market activity. Below are the latest key stats for informative comparison and decision-making.
| Price | 24h Volume | Market Cap | Circulating Supply |
|---|---|---|---|
| $65.75 | $14,800,000 | $510,000,000 | 7,800,000 COMP |
Data source: OKX Price Tracker
COMP trades on major exchanges like OKX, Coinbase, and Binance. For a seamless experience, you can buy COMP on OKX and access integrated earning opportunities.
How to Use Compound: Earn, Borrow, and Repay
Getting started with Compound is straightforward, especially when using platforms like OKX Earn. Here’s a step-by-step guide for both earning and borrowing:
Supplying Assets (Lending)
- Connect Your Crypto Wallet: Log in to a supported DeFi wallet or integrated exchange like OKX Earn.
- Choose the Asset: Select from supported tokens (ETH, USDC, DAI, and more).
- Deposit: Specify the amount and confirm the transaction. Once supplied, you’ll receive cTokens representing your balance.
- Monitor Yields: Interest accrues automatically, and you can view up-to-date APY anytime in your dashboard.
Borrowing Assets
- Supply Collateral: Deposit supported crypto as collateral into Compound. The more collateral, the higher your borrowing limit.
- Select Borrow Asset: Choose what you want to borrow (e.g., USDC) and the amount, ensuring you don’t exceed your borrowing power.
- Initiate Borrow: Approve the transaction. You’ll receive the borrowed assets directly to your wallet.
- Compound requires over-collateralization (typically 120–150%) to reduce liquidation risk, which can occur if asset prices change and your collateral falls below the safe threshold.
Withdrawing and Repaying
- Repaying: Send back the borrowed asset, plus any accrued interest, to close your borrow position.
- Withdrawing Assets: Once any borrowed balance is repaid, you can withdraw your supplied collateral immediately.
- Managing Positions: OKX and Compound dashboards make it easy to track, repay, or withdraw funds securely.
For a streamlined, user-friendly experience, OKX Earn enables you to access Compound’s yields directly from your OKX account.
Supported Assets & Typical Yields (APY)
Compound supports multiple blue-chip assets for both lending and borrowing. Here are current example APYs (rates as of June 2024):
| Asset | Lending APY | Borrowing APY | Min. Deposit |
|---|---|---|---|
| USDC | 2.45% | 3.83% | $10 |
| ETH | 1.78% | 2.95% | 0.01 ETH |
| DAI | 2.10% | 3.61% | $10 |
| USDT | 2.05% | 3.65% | $10 |
APYs are variable and reflect current protocol rates. Visit OKX Earn to check Compound’s latest supported assets and real-time yields.
Compound Security: Audits, Insurance, and Risk Management
Security is central to Compound's reputation. The protocol undergoes regular, thorough audits by top blockchain security firms to identify vulnerabilities. Compound also offers a robust bug bounty program, paying ethical hackers for finding and reporting issues before they impact users.
Risks exist—including liquidations (if collateral falls below safety limits) and interest rate fluctuations—but these are managed through transparent smart contract logic and real-time monitoring tools.
To boost security, platforms like OKX add insurance protection and rigorous operational standards. Users on OKX also benefit from multi-layered account security, transparent proof-of-reserves, and advanced fraud prevention.
💡 Pro Tip: Always use 2FA and secure wallets when interacting with any DeFi protocol.
Compound Integrations & Ecosystem
Compound is widely integrated across the DeFi ecosystem. You can access Compound directly via interfaces like Metamask, Ledger, and wallet apps, or indirectly via major exchanges and aggregators.
OKX is one of the premier integration partners, offering users secure access to Compound through OKX Earn. This integration blends the benefits of DeFi yields with centralized exchange convenience, including one-click lending, clear APY displays, and enhanced user protections.
In addition, Compound powers lending for other dApps, portfolio trackers, and financial tools, cementing its role in the digital asset ecosystem.
Compound vs Other DeFi Protocols
Choosing the right lending platform involves comparing features, rates, and risk. Here’s how Compound measures up against Aave, OKX Earn, and traditional finance:
| Platform | Type | Typical APY | Security | Ease of Use |
|---|---|---|---|---|
| Compound | DeFi Lending | 1.5-2.5% | Audited | Moderate |
| Aave | DeFi Lending | 1.5-3.0% | Audited | Moderate |
| OKX Earn | CEX+DeFi | 2-6% | Excellent | Very Easy |
| Traditional Bank | Savings Acct | 0.1-0.5% | Insured | Very Easy |
OKX Earn uniquely offers both CEX-level security and seamless access to Compound yields.
Frequently Asked Questions
What is Compound and how does it work?
Compound is a decentralized lending and borrowing protocol that lets users earn interest by supplying crypto or borrow by putting up collateral. When you deposit assets, you receive cTokens that track your balance and interest. Borrowers put up collateral and draw loans in other supported crypto.
How do I earn interest with Compound?
To earn interest, supply any supported token (like ETH or USDC) on Compound. You'll instantly start earning APY, which adjusts automatically. The process is even simpler on OKX Earn, where you can deposit, monitor yields, and withdraw all in one place.
Is Compound (COMP) safe to use?
Compound is considered safe, thanks to multiple security audits and an active bug bounty program for finding vulnerabilities. Using secure platforms like OKX adds more protection via insurance, secure custody, and robust account controls.
How does COMP governance work?
Holders of COMP tokens can make protocol proposals, vote on upgrades, and help steer the direction of Compound. Anyone with COMP can participate or delegate their voting rights to another member of the community.
What assets can I supply/borrow on Compound?
You can supply or borrow top cryptocurrencies including ETH, USDC, DAI, and USDT, among others. For the full, up-to-date list, check the supported assets table above or visit OKX Earn.
What's the difference between Compound and Aave?
While both are DeFi lending platforms, Aave supports more assets and features like flash loans, while Compound is known for simplicity and strong governance. Each protocol uses its own incentives and voting structure for improvements and rewards.
Conclusion
Compound makes earning and borrowing in crypto simple, transparent, and accessible to anyone. As a leader in DeFi lending, Compound offers real-time rates, protocol security, and decentralized governance. You can enjoy the benefits of the compound protocol with extra peace of mind using OKX Earn for seamless access and added security.
Ready to start earning or borrowing? Try Compound today via OKX Earn and join the future of DeFi lending.
Crypto trading and DeFi lending carry risks. Only supply assets you can afford to lose and always review platform security features before participating.
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