compoundtutorials
  • Chapter 1: Introduction to Compound
    • 1. What Is Compound?
    • 2. Introducing Comet (Compound V3)
    • 3. What’s Next?
  • Chapter 2: Markets, Utilization & Interest Rates
    • 1. What Is a Market in Comet?
    • 2. Utilization: Balancing Supply & Demand
    • 3. The Kink: A Flexible Threshold
    • 4. Interest Rate Parameters
    • 5. Supply and Borrow Interest Rates vs. Utilization Rate Chart
    • 6. Why This Matters
  • Chapter 3: Hands-On Tutorial (Step by Step)
    • 1. Environment Setup
    • 2. Getting Sepolia ETH and WETH
    • 3. Project Structure
    • 4. Creating the index.js Script
    • 5. Run the Script
    • 6. Next Steps
  • Chapter 4: Repaying, Withdrawing & Managing Your Position
    • 1. Updating index.js
    • 2. Example Usage in Your Main Execution
    • 3. Recap
    • 4. Summary & Best Practices
  • Chapter 5: Using the Compound.js SDK
    • Getting Started
    • Performing Common Actions
  • Chapter 6: Additional Resources
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  1. Chapter 1: Introduction to Compound

1. What Is Compound?

Compound is a decentralized lending protocol that operates on various blockchain networks, primarily Ethereum. At its heart, Compound turns the lending and borrowing of cryptocurrencies into a streamlined, trustless process—no banks or gatekeepers required. If you have spare crypto assets, you can supply (lend) them through Compound to earn interest. If you need liquidity, you can borrow certain tokens by posting collateral, all while keeping ownership (and potential upside) of your collateralized assets.

A Brief History

Since its inception, Compound has focused on making digital asset lending safer and more accessible. Earlier versions allowed multiple assets to be borrowed from the same market, introducing complexity in risk management. Compound V3—codenamed “Comet”—simplifies this system.

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