Compound

Compound is one of the original DeFi lending protocols. Compound III simplifies each market to a single borrowable base asset with other assets posted purely as collateral.

Compound III is simpler than Aave — one base borrowable asset per market makes risk easier to understand, at the cost of multi-asset flexibility.

- Compound III markets: Single base borrowable asset per market with separate collateral assets posted as collateral only. - COMP governance: Token holders propose and vote on new markets, collateral factors, and protocol upgrades.

- Compound (COMP) — Token, DAO governance token

- Smart Contract: Upgradeable or complex lending logic can fail under edge-case liquidations or parameter misconfiguration. - Oracle: Stale or manipulated price feeds impair collateral valuation and liquidations. - Collateral: Correlated collateral drawdowns or listing errors can create bad debt in money markets. - Liquidity: Thin borrow/supply depth impairs exits and liquidations during market stress. - Governance: Parameter changes, listings, and emissions are controlled by token holders or delegates. - Market design: Single base-asset markets concentrate borrow demand on one asset per deployment.

- Money-market fund: similar — Suppliers earn a variable yield on assets lent from a pooled book of borrowers, comparable to a fund passing through short-term rates.; differs — Loans are overcollateralized and enforced by smart contracts and automatic liquidations; non-custodial, permissionless, with rates set algorithmically by pool utilization rather than a fund manager. - Secured revolving credit line: similar — In Compound III a borrower posts collateral and draws/repays a single base asset (e.g. USDC) at a floating rate, like a secured line of credit.; differs — Fully collateralized on-chain and liquidated automatically once the borrow position breaches its collateral factor; no lender underwriting or credit checks.