Crypto lending firm Compound has announced that its borrowing and lending protocol is now live on Base, the Layer 2 solution developed by Coinbase. Compound currently has a USDC bridge and an ETH market on Base and is working towards expanding its base protocol towards other interoperability segments.
Notably, the protocol also launched Arbitrum’s native USDC market on the Compound app. This enables users to transfer USDC from Arbitrum’s market to other chains (via Circle’s cross-chain transfer protocol, or CCTP), without needing an Ethereum bridge.
The native USDC market on @arbitrum is live on Compound.Users can transfer native USDC from the Arbitrum market to different chains via @circle Cross-Chain Transfer Protocol (CCTP), without needing to bridge back to Ethereum.View the new market:https://t.co/9yObhMLsMP
— Compound Labs (@compoundfinance) September 6, 2023
Core changes that come with the launch on Base are explained briefly in a blog post by the platform:
"ETH and cbETH can be used as collateral to borrow bridged USDC, or cbETH to borrow ETH in each respective market."
The bridged USDC Arbitrum market will continue to operate while Arbitrum develops its native migration solution. Compound's progressive web app also added a few updates to its dashboard as it now shows net interest rates; hovering over APR (annual percentage rates) in the dashboard also reveals how the net rates are calculated. For example, pairing USDC and Ethereum, one gets 2.00% Net Borrow APR when 1.94% interest (protocol distributed in $COMP) is subtracted from 3.94% interest (paid to suppliers in $USDC).
Compound Labs, the firm behind the DeFi protocol, has been around since 2018 and has been a consistently leading protocol for borrowing and lending. It has also extended its services to institutional clients and has since developed integration with the latest frameworks in DeFi. Compound stands out as a borrowing-lending platform in that you can earn interest from its own native token COMP.
Perhaps notably (compared to most other players in the DeFi sector), Compound requires no minimum deposits and there is a high potential for high compound interests. What’s more, getting started is quite simple because there are no KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures to worry about; Compound has its own protocols for those, which are also kept under tight regulatory frameworks with full auditing for the platform's backend.
The only catch is that, in order to maximize the protocol's yield efficiency, an ostensibly steep learning curve is required for lending and borrowing, as well as for the use of COMP for other purposes from within its ecosystem.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
