What it means
One of the first open lending protocols, where people supply tokens to earn a variable rate and others borrow against collateral.
Each market has one borrowable token, such as USDC, which keeps risk contained.
How it works
Compound is one of the audited markets in Defied's Markets.
Related terms
| Term | What it means |
|---|---|
| Lending market | An onchain pool where people supply money that others borrow, with the interest paid by borrowers going to those who supplied it. |
| Aave | One of the largest open lending protocols, where people supply tokens to pools and others borrow them against collateral. |
| Collateral | What a borrower deposits to secure a loan, which the protocol can sell if the loan isn't safe any more. |
This glossary explains terms in general. It isn't investment, tax or legal advice.