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What Is Compound?

Compound is a decentralized, algorithmic interest rate protocol on Ethereum and several other EVM chains. It lets users supply crypto assets to earn yield or use those assets as collateral to borrow other assets, with interest rates set algorithmically based on supply and demand. Compound pioneered the on-chain money market model, and its 2020 launch of the COMP governance token, distributed via "liquidity mining" to users of the protocol, is widely credited with kicking off the wave of activity known as DeFi summer.

Compound was founded by Robert Leshner and Geoffrey Hayes (both formerly of Postmates) in 2017, under the company name Compound Labs. The first version of the protocol launched in September 2018, followed by Compound v2 in May 2019, which introduced cTokens (interest-bearing receipt tokens such as cDAI and cETH). The COMP token went live in June 2020, distributed to suppliers and borrowers via liquidity mining, and the model was quickly adopted across other DeFi protocols.

Compound v2 used a multi-asset pooled architecture: every supported asset had its own market, and any supplied asset could serve as collateral to borrow any other listed asset. This was simple and capital-efficient, but it meant that the risk profile of every market was correlated: a problem in one asset could threaten the whole protocol. Compound v3 (also known as "Comet"), launched in August 2022, redesigned the architecture around a single borrowable asset per deployment. Each Comet has one base asset (for example, USDC, USDT, USDS, WETH, or wstETH) plus a curated set of collateral assets that can be used to borrow that base asset but cannot themselves be borrowed. The result is isolated risk, simpler accounting, and tighter risk controls per market.

COMP has a hard cap of 10 million tokens. The original distribution allocated 4.2 million COMP to protocol users over four years, roughly 24% to shareholders, 22% to founders and team, and the remainder to the community and governance reserve. COMP is a pure governance asset: each token represents one vote on Compound's on-chain proposals, which decide everything from supported assets and risk parameters to the deployment of new Comet markets and treasury allocations.

Compound has historically been one of the most actively governed DeFi protocols, with a long-running governance forum at comp.xyz and a steady cadence of community-driven proposals. Risk management partnerships with firms like Gauntlet have been renewed across multiple terms, with the most recent partnership covering the broad set of Comet deployments now active.

By 2026, Compound v3 is deployed on Ethereum mainnet, Arbitrum, Base, Optimism, Polygon, Linea, Mantle, Scroll, and Unichain, with continued multichain expansion an active focus. Compound v2 has been formally deprecated and wound down via governance, with reserves managed by the Compound Foundation. The Foundation, established in 2025, published its inaugural transparency report in late 2025 and unveiled a v4 platform roadmap in early 2026.

Robert Leshner stepped down as CEO of Compound Labs in early 2023 to found Superstate, a tokenized US Treasuries fund manager. Geoffrey Hayes also stepped back from day-to-day operations. Stewardship of the protocol has since shifted to the broader DAO and the Compound Foundation, with Compound Labs no longer a primary operator.

Getting Started With Compound

Using Compound to supply or borrow assets:

  1. Step 1: Connect an EVM wallet (MetaMask, Rabby, Coinbase Wallet, etc.) to the Compound app.
  2. Step 2: Choose a Comet market based on the base asset you want to earn yield on or borrow.
  3. Step 3: Supply assets to earn yield, or supply collateral and borrow the base asset, monitoring your position's collateralization closely.
  4. Step 4: Optionally claim COMP rewards (where active) and either hold COMP for governance or supply it back into a Compound market.

Comet markets are isolated, so a problem in one market should not directly affect another. Pay attention to each market's collateral list, liquidation thresholds, and oracle setup before depositing.

How to Get a Compound Wallet?

COMP is an ERC-20 token and works with any Ethereum-compatible wallet:

MetaMask

MetaMask is the most widely used wallet for interacting with Compound. It supports every chain Compound is deployed on and integrates directly with the Compound app.

Rabby

Rabby is a popular alternative for DeFi power users, with strong transaction simulation and multi-chain support. It works smoothly with Compound across all supported chains.

Coinbase Wallet

Coinbase Wallet (the self-custody wallet) supports COMP and provides easy access to Compound through its built-in dApp browser, including on Base.

Hardware Wallets

Ledger and Trezor hardware wallets support COMP and can be connected through MetaMask or Rabby to interact with Compound while keeping keys offline. Hardware wallets are strongly recommended for larger long-term holdings.

Compound Resources

How to Buy Compound?

COMP is widely listed on major exchanges:

Centralized Exchanges

COMP can be purchased on Coinbase, Binance, Kraken, Bitstamp, Gemini, OKX, and Bybit, among others. Both fiat-to-COMP and crypto-to-COMP pairs are widely available.

Decentralized Exchanges

COMP can be purchased on Uniswap and other DEXs, with aggregators such as 1inch and CowSwap useful for routing across multiple pools.

After purchasing, COMP can be held for governance participation or supplied to a Compound market that accepts it as collateral.

Latest Compound News

Compound's recent direction has been shaped by the establishment of the Compound Foundation in 2025 and a coordinated multichain expansion of Compound v3. The Foundation's inaugural transparency report in December 2025 and the v4 platform roadmap unveiled in January 2026 outline a strategy of gradual modernization and broader L2 deployment, including the addition of Linea, Mantle, and Unichain markets. The deprecation of Compound v2 was also formalized through governance in late 2025, with reserves transitioning to managed treasury control.

The protocol is not without history. A bug in proposal 062 in 2021 accidentally over-distributed a large quantity of COMP, and a follow-on drip exploit moved additional tokens before the fix landed. The official @compoundfinance X account was briefly compromised in late 2023 to promote a phishing site and was recovered within 24 hours. TVL on Compound has lagged that of Aave for several years, but the v3 architecture and the Foundation's renewed stewardship have refocused the project on conservative, isolated lending markets. Following the comp.xyz governance forum is the best way to stay current on token-relevant developments.