Verified against compound.finance on 6 Sep 2026. Terms change; confirm before borrowing.
How Compound works
Compound v3 ("Comet") organizes each market around a single base asset — here, USDC — that you borrow against approved collateral such as WBTC and cbBTC. You supply collateral and draw USDC from your own wallet; there's no account or fixed term. USDC Comet markets run on Ethereum, Base, and several L2s.
Rates & fees
The base USDC borrow APR is variable, around 5.8% as of 6 September 2026, moving with utilization on the Ethereum market — it has swung between roughly 4% and 12% over the past few weeks — and the net cost is often lower still, because Compound streams COMP rewards to borrowers in active markets. There's no protocol borrow fee; you pay gas plus the floating interest.
LTV & liquidation
Compound sets two factors per collateral: a borrow collateral factor (around 85% for WBTC — the most you can borrow against it) and a higher liquidation collateral factor that triggers a forced sale. Exact values are on-chain and can change via governance. As always, borrowing near the cap leaves little room on a volatile asset.
Custody & safety — why we rate Compound Medium relative risk
Source: Compound III audit (OpenZeppelin) ↗
Compound is non-custodial — collateral is held in the Comet smart contract, controlled by no company and not rehypothecated. We rate it Medium for the standard DeFi reasons: smart-contract risk, tokenized-BTC risk, variable rates, and self-managed liquidation. Its long history as one of DeFi's original money markets is a point in its favor. See the risk methodology.
What a $50,000 Compound loan costs
COMP borrower rewards can offset a meaningful share of the interest in active markets — check the live net rate. Figures illustrative.
Pros & cons
Strengths
- Rate offset by COMP borrower rewards
- Established, audited protocol
- Non-custodial, no KYC
- Available across several networks
Trade-offs
- WBTC/cbBTC are tokenized, not native BTC
- Smart-contract and liquidation risk on you
- COMP rewards vary and can end
- Variable rate; requires wallet + gas know-how
Who Compound is best for
Compound suits on-chain borrowers chasing the lowest net rate who can monitor COMP rewards and their health factor. For a managed front-end use Coinbase; for native bitcoin with support, compare the CeFi lenders in the table.
FAQ
What rate does Compound charge to borrow against Bitcoin?
A variable USDC base rate around 5.8%, often reduced by COMP borrower rewards, plus gas.
How much can I borrow on Compound against WBTC?
Up to roughly an 85% borrow collateral factor for WBTC; liquidation triggers at a higher liquidation factor. Values are governance-set.
Is Compound custodial?
No. Collateral is held in the non-custodial Comet smart contract and is not rehypothecated.
Why is Compound rated medium risk?
Because DeFi removes counterparty risk but adds smart-contract risk, tokenized-BTC risk, variable rates, and self-managed liquidation.
See Compound next to every other lender
Live rates, LTV, liquidation thresholds, custody, and minimums for every lender we track in one verified table.
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