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 is the original algorithmic money market: users supply assets to a pool, interest rates adjust in real time with utilisation, and borrowers post collateral to draw funds. Compound III, codenamed Comet, replaced the pooled-risk model of v2 with a one-base-asset-per-market design in which each deployment supports a single borrowable base asset and a list of collateral assets that cannot themselves be borrowed and earn no interest (Compound docs). Borrowing capacity comes from a per-collateral `borrowCollateralFactor`, capped by a per-asset `supplyCap`, with a `baseBorrowMin` floor on position size and signed base-token balances where positive means supplied and negative means borrowed (Compound docs). Loans are perpetual and liquidation is via `absorb()`, which transfers collateral to protocol reserves at a discount (Eco). Users are mostly stablecoin borrowers seeking leverage on blue-chip collateral, plus COMP-incentivised suppliers.

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 - cUSDC, cETH, cDAI (and other cTokens) (cUSDC): Receipt, Lending Receipt 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.

- Underwriting: similar in that Per-collateral `borrowCollateralFactor` (WBTC 85% in the docs example) and per-asset `supplyCap`, with a `baseBorrowMin` minimum position size; differs in that Advance rates by pledge category with a facility minimum drawdown - Collateral: similar in that Collateral-only assets that cannot be borrowed and earn no interest; pure backing; differs in that Pledged securities held in a charged account, not rehypothecated - Settlement: similar in that Per-chain independent Comet deployments; each chain runs its own markets with no shared liquidity; differs in that A facility booked in one branch or entity, not netted across the group - Rate setting: similar in that Algorithmic supply and borrow indices accruing per block, with market parameters set by COMP governance through a single Configurator contract; differs in that Facility priced off a reference rate plus a spread reset by credit committee - Recourse on default: similar in that None. `absorb()` moves collateral into protocol reserves at a discount and credits the protocol with base asset; differs in that Bank enforces the charge and sells the pledge; no further recourse in a non-recourse facility - Regulation: similar in that Unlicensed protocol governed by COMP holders through the Timelock; a proposed 501(c)(4) Delaware non-profit provides the off-chain legal wrapper; differs in that Licensed bank under prudential capital and large-exposure rules