Overview

Compound is a decentralized finance (DeFi) lending protocol that enables users to earn interest on their cryptocurrencies by depositing them into various supported pools, where interest rates dynamically adjust based on asset utilization. Built by Compound Labs, a technology company focused on secure, capital-efficient, and transparent financial infrastructure, the protocol pioneered algorithmic money markets and introduced one of the earliest open-source governance systems in DeFi. Compound Labs works cross-chain, has explored Layer-1 blockchain concepts through its Gateway initiative, and has developed institutional products such as Compound Treasury, with backing from major investors including a16z, Paradigm, Coinbase Ventures, Bain Capital, Polychain Capital, and Dragonfly Capital. Its latest iteration, Compound III, is an EVM-compatible protocol that allows users to supply crypto assets as collateral to borrow a base asset while earning interest for supplying that base asset. Interest rates for suppliers and borrowers are governed parameters that adjust based on utilization, with a “kink” model that accelerates rate changes past a certain threshold, and interest accrues continuously using block timestamps.

Whitepaper & Documents