Plain English
Compound is one of the earliest DeFi lending protocols, launched in 2018. The June 2020 COMP token distribution kicked off “DeFi Summer.” Compound v3 (Comet) shifted to single-borrowable-asset markets (USDC, USDT) for cleaner risk management. Available on Ethereum, multiple L2s, and Polygon.
How it actually works
Comet markets isolate risk: each market has one borrowable asset and multiple collateral assets. Interest rates float based on utilization. Liquidations are partial (only enough to bring health factor above threshold). COMP governance controls all market parameters and treasury — one of the most-active DAO governances in DeFi.
What it means for you
For HNW lending, Compound is the conservative alternative to Aave. Smaller TVL, longer security track record. Useful as a venue for stablecoin lending where rate differentials between Aave and Compound create opportunities. Most active DeFi users hold positions on both for diversification.
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Educational content only. Not investment, tax, or legal advice.