Compound Finance
AuditedVerifiedCompound Finance is one of the original DeFi money markets — an autonomous, on-chain lending protocol with cToken pools (v2) and single-base-asset Comet markets (v3) deployed across major EVM chains and governed entirely on-chain by COMP holders.
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The Problem
Crypto holders want yield on idle balances and on-chain borrowers want capital without intermediaries, with transparent risk parameters and zero custody.
The Solution
Compound pools supply and demand into algorithmic interest-rate markets — suppliers receive cTokens/Comet shares that accrue interest; borrowers post collateral and draw the base asset, all governed on-chain by COMP holders.
Why it Matters
Original cToken model + Comet's single-base-asset design pioneered two distinct lending architectures that have shaped the entire DeFi lending category. Battle-tested through every major DeFi stress event since 2018.
Protocol Metrics
Related Research
View allFrequently asked questions about Compound Finance
What is Compound Finance?+
Compound Finance is a Lending protocol operating on Ethereum, Arbitrum, Base, Optimism, Polygon, Scroll, Mantle. Compound Finance is one of the original DeFi money markets — an autonomous, on-chain lending protocol with cToken pools (v2) and single-base-asset Comet markets (v3) deployed across major EVM chains and governed entirely on-chain by COMP holders.
How does Compound Finance work?+
Compound pools supply and demand into algorithmic interest-rate markets — suppliers receive cTokens/Comet shares that accrue interest; borrowers post collateral and draw the base asset, all governed on-chain by COMP holders.
Is Compound Finance safe?+
DeFi Sentinel rates Compound Finance AAA with a safety score of 94/100, indicating highest safety tier. The score reflects five risk dimensions: smart contract & technical risk, economic design & market risk, governance & centralization, sustainability & competitive position, and reputation & social trust. Compound Finance has 4 audits on record. DeFi Sentinel's analysis flagged 2 medium, 2 low risk alerts across Smart Contract & Technical Risk, Economic Design & Market Risk, Governance & Centralization and Sustainability & Competitive Position. As with all DeFi protocols, residual risk remains and users should review the full risk breakdown before depositing.
What is the safety score of Compound Finance?+
Compound Finance has a DeFi Sentinel safety score of 94/100 (rating AAA), last updated September 16, 2026. The score is computed across smart contract & technical risk (30%), economic design & market risk (25%), governance & centralization (20%), sustainability & competitive position (15%), and reputation & social trust (10%).
Which chains does Compound Finance support?+
Compound Finance is deployed on Ethereum, Arbitrum, Base, Optimism, Polygon, Scroll, Mantle.
Has Compound Finance been audited?+
Yes. Compound Finance has 4 audit reports on record from firms including OpenZeppelin, ChainSecurity, Trail of Bits. Audit reports and dates are linked under the Resources tab on this page.