Key Takeaways

• Compound is a decentralized lending protocol. It lets you borrow and lend crypto assets without intermediaries.
• Earn interests or unlock liquidity using assets in your wallet, all via smart contracts.
• Learn more about cTokens, which are given to you for every lend or borrow action you do. They represent your assets, and accrue interests over time.

What Is Compound Finance?

Compound Finance is a DeFi protocol that allows users to supply crypto assets to a pool and earn interest, or borrow against those assets without needing permission from any intermediary, like banks or middlemen. It’s powered via smart contracts, and is designed for efficiency and transparency across the ecosystem.

What You Can Do on Compound

• Supply/Lend: You can supply your own crypto tokens to earn interest over time.
• Borrow: You can borrow assets by providing a collateral.
• Monitor: You can monitor your positions in real-time via the Compound interface.

How Lending & Borrowing Works on Compound

1. Supply Assets

When you deposit an asset (like wRON or wETH), you’re supplying it to the market. You start earning interest immediately, based on the demand for that asset. Interest rates are a function of the liquidity available in each market, and fluctuate in real-time based on supply and demand.

2. Receive cTokens

In return for supplying, you receive cTokens (cWETH). These represent your position and automatically get interest.

3. Use as Collateral

You can also use your supplied assets as collateral in borrowing another asset.

4. Borrowing Assets

The amount you borrow depends on the value of the collateral you lock up (Loan-to-Value ratio, or LTV).

5. Repay Loans + Withdraw Collateral

Once borrowed amount is paid, you can freely withdraw your collateral.

What are cTokens?

cTokens are interest-bearing tokens that represent your deposit in Compound. You can think of your cTokens are your receipt after you interacted with the protocol. Be careful, as cTokens can be traded and sent to other addresses. Be sure to read more in Compound’s documentation about cTokens.

Here are some more relevant details and a step-by-step guide on how to acquire cTokens.

• cTokens accumulate interest over time, automatically.
• You can redeem cTokens anytime to get back your underlying asset plus any earned interest. No locking period!

Step 1: Visit Compound Markets or Complend.Tech. In this example, we’ll be visiting Complend.Tech, the user interface for boosted DeFi rewards on Ronin.

Step 2: This example will be tackling wETH lending. Once you select your preferred market and read the important details like Annual Percentage Rate (APR) to understand the interest you earn, press Lend.

Step 3: Connect your wallet, select your assets for lending, and confirm your transaction.

Step 4: Once confirmed, you will be given cTokens based on how assets much you lent. Check the relevant transactions like the one attached below.

🗳️ How Compound Governance Works

Compound is governed by its community through its native token, $COMP. This token plays a crucial role in managing the protocol and proposing future improvements and implementations. Here’s how it works:

• Propose Changes: $COMP holders can propose changes to the protocol, including adding new markets, changing interest rate models, and upgrading system parameters.
• Vote: Holders of this token vote on these proposals. Every token means one vote.
• Execution: Passed proposals are executed by the protocol after a set time delay (timelock), ensuring transparency and review time.

Governance ensures that Compound evolves in a decentralized, community-driven way. If you are interested in being part of the process, read this documentation on governance in Compound.

Start Earning with Compound: Here's How

There are various ways to start borrowing/lending and ultimately, earning.

1. Ronin Blitz Opportunities

• If you want to start lending/borrowing, do it while earning more on pools that are incentivized. Visit the Ronin Blitz webapp now and start exploring opportunities.

2. Compound.Finance / Complend.Tech

• Should you wish to explore other available markets, you can go directly to Complend.Tech, or Compound Markets.