Compound Finance in 2025: Lending, Borrowing, and Onchain Interest at Scale

Compound remains one of the foundational protocols of DeFi, and in 2025 it continues to operate as a decentralized hub for crypto lending and borrowing. Built on Ethereum and integrated across multiple chains, Compound Finance offers users a transparent, algorithmic money market with competitive interest rates and onchain governance via the COMP token.

Whether you’re using compound.icu or compound.ceo, the protocol allows you to earn APY on crypto assets or borrow against your holdings — all without intermediaries or centralized risk.

What Is Compound Finance?

Compound is a decentralized lending protocol that enables users to deposit crypto assets into liquidity pools and earn interest in real time. Other users can borrow from these pools by posting collateral. Interest rates are determined algorithmically, based on supply and demand.

Compound operates as a core DeFi infrastructure layer, supporting assets like ETH, USDC, DAI, WBTC, and more. It also pioneered the cToken model — tokenized representations of supplied assets that accrue value as interest is earned.

How Compound Lending and Borrowing Work

The protocol uses smart contracts to manage liquidity, collateral, and repayment. When you deposit an asset into the Compound app, you receive a cToken (such as cETH or cDAI) in return. These tokens accrue interest automatically as long as they are held.

To borrow, you simply supply collateral above a protocol-defined threshold and take out a loan in supported assets. Repayment is flexible and can be done at any time.

Advantages of Compound include:

• Transparent interest rates updated in real time
• No KYC or login required — just a connected wallet
• Non-custodial and fully decentralized infrastructure
• cTokens that accrue yield directly in your wallet
• Compound APY that adjusts based on market liquidity

This model makes Compound ideal for both passive earners and active onchain borrowers.

COMP Token and Governance in 2025

The COMP token is the governance asset of Compound. Holders of COMP can propose and vote on changes to the protocol — including interest rate models, supported assets, collateral factors, and upgrades.

In 2025, Compound governance continues to be one of the most active in DeFi. Participants can:

• Vote on protocol upgrades
• Delegate voting power
• Propose new lending markets
• Earn COMP through protocol usage

Compound governance gives users full control over the direction of the protocol — aligning incentives between developers, LPs, and borrowers.

How to Use the Compound App

Using Compound is simple:

• Visit compound.icu or compound.ceo
• Connect your Web3 wallet
• Choose an asset to supply or borrow
• Confirm the transaction onchain
• Monitor your interest rate and position in the dashboard

You retain control of your funds at all times. There is no Compound Finance login — everything is managed via your wallet.

cTokens are sent directly to your address, and interest accrues automatically. Withdrawals and repayments can be done at any time.

Staking and Wallet Integration

While Compound does not offer traditional staking, the protocol’s supply function works as a form of passive yield. By supplying assets, users automatically earn based on Compound interest rates. There’s no need to lock up assets — just hold cTokens and earn.

Compound integrates with major DeFi wallets and interfaces, including:

• MetaMask
• Ledger
• Coinbase Wallet
• WalletConnect-compatible apps

This makes Compound Finance staking-like behavior easily accessible via the wallet you already use.

Compound Finance Tutorial for New Users

If you’re new to DeFi, here’s a fast Compound tutorial:

• Deposit USDC or ETH into Compound
• Receive cUSDC or cETH in your wallet
• Hold to earn interest automatically
• Use deposited collateral to borrow DAI or WBTC
• Repay at any time to unlock your full position
• Track interest, APY, and wallet balances in real time

The process is straightforward, but highly efficient — ideal for both individual users and DAO treasuries.

Compound Finance Review and Market Position

As of 2025, Compound remains one of the most trusted and audited protocols in the DeFi ecosystem. With billions in TVL, active governance, and years of onchain performance, it serves as a reference model for decentralized lending.

Compound Finance alternatives exist — like Aave, Morpho, and Euler — but Compound’s simplicity, cToken model, and decentralized governance still make it the default for many users.

Key highlights from recent Compound Finance reviews include:

• High protocol reliability
• Consistent yields across assets
• Strong DAO participation
• Battle-tested smart contracts
• Ongoing updates to collateral risk models

Whether you’re an institutional participant or an individual lender, Compound continues to offer secure, transparent yield in a volatile market.

Conclusion: Compound Finance Is Still the Core of DeFi Lending

Compound didn’t just launch DeFi lending — it defined it. In 2025, it remains a vital part of the decentralized finance infrastructure. Through lending, borrowing, COMP governance, and cToken design, it gives users unmatched control and transparency.

Start earning today via compound.icu or borrow from your wallet through compound.ceo — Compound still sets the standard.

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