What is Compound Lending?

Compound is a decentralized on-chain money market and lending platform, establishing pools of assets with interest rates algorithmically derived from the assets’ supply and demand.

The main value proposition for Compound is it allows users to earn a yield on their crypto assets without having to custody them with a third party.

With DeFi Earn integration, we handle the deposit and withdrawal process with Compound Lending natively on the DeFi Wallet app, hence you don’t have to worry about dealing with smart contract calls and we simplify the concept of cTokens and display the accrued interest you’re earning overtime -

When your tokens are deposited to the Compound Lending protocol via DeFi Earn, you are transferring them to Compound’s smart contract. In exchange, you get the corresponding cTokens which represent the claim to your lent assets.

Interest isn't distributed but by simply holding cTokens, you'll earn interest as cTokens accumulate interest through their exchange rate — over time, each cToken becomes convertible into an increasing amount of its underlying asset, even while the number of cTokens in your wallet stays the same. Hence, we display an extra warning when you’re trying to send your cTokens to ensure you understand the implication of sending away your claim to lent assets + the accrued interest.

When you decide to withdraw, you are essentially sending cTokens to Compound to redeem your deposited assets along with the accrued interest based on the cToken <> underlying token exchange rate.

To learn more about Compound Lending, you may view here for our in-house research article on Compound.

Read on to learn about how to deposit, view earnings, withdraw via DeFi Earn - Compound Lending.

How do I deposit my crypto assets to DeFi Earn - Compound Lending?

  1. Tap [Earn] on the bottom navigation of your DeFi Wallet app
  2. Tap [Start Earning] to see the list of tokens supported for earning
  3. Select your preferred token and enter the deposit amount to see the projected annual earning based on the latest APY%
  4. Review and confirm the deposit by tapping [Confirm Deposit]
  5. Authorize the deposit request with your passcode (and 2FA if enabled)
  6. Wait for the on-chain confirmation of your deposit request
  7. Once confirmed, you will see the refreshed total assets amount on your DeFi Earn screen

On the DeFi Earn home screen, you will also be able to see the estimated APY % by tokens. The tokens you deposit into DeFi Earn will be linked to one protocol for earning interest at the time of deposit. Your deposited asset will start accruing interest once the deposit is confirmed on-chain.

How do I view my earnings or deposited assets via DeFi Earn - Compound Lending?

Simply navigate to the DeFi Earn, by default we will show your total DeFi Earn assets in fiat equivalence in “Total USD Amount”

  • Tap on “Total USD Amount” to switch to “Total Crypto Amount” and view your DeFi Earn assets in crypto amount
  • Tap on “Total Crypto Amount” to switch to “Earnings” and view your estimated earnings

For a more granular breakdown, you can tap onto a specific token and you will be able to see the latest APY %, total deposited asset amount, and accrued earnings in crypto amount.

How do I withdraw my crypto assets from DeFi Earn - Compound Lending?

There is no lockup period for the deposit and you can withdraw your crypto assets from DeFi Earn at any time. Here are the steps to withdraw your crypto assets from DeFi Earn:

  • Withdrawal via DeFi Earn tab
  1. from home screen, navigate to the DeFi Earn tab at the bottom
  2. On DeFi Earn screen, select the token you would like to withdraw from the “Assets” section
  3. Tap onto the “Withdraw” button on the DeFi Earn Details screen
  • Withdrawal via wallet balance
  1. From home screen, tap onto “DeFi Earn Assets”
  2. Select the token on the assets screen
  3. You will arrive at your wallet balance screen, tap “View Earnings”
  4. Tap onto the “Withdraw” button on the DeFi Earn Details screen

After confirming the withdrawal, you’ll see the pending status on both your home screen and the DeFi Earn screen.

How is my DeFi Earn interest and service fee calculated for Compound Lending?

To help you better understand each of the steps from depositing to withdrawing from DeFi Earn, here’s a sample:

  • Day 1: Deposit into DeFi Earn
  1. You deposit 100 DAI
  2. In return, you get 200 cDAI based on the exchange rate
  • Day 10: Check earnings
  1. Based on the exchange rate on that day, the 200 cDAI you have are now worth 102 DAI
  2. In total, you have accrued interest 2 DAI

Say you decide that you want to withdraw your crypto assets from DeFi Earn on Day 10:

  • Withdraw all earnings
  1. You input the withdraw amount, i.e. 102 DAI
  2. Upon confirmation, we transfer the underlying 200 cDAI to Compound in order to withdraw the 102 DAI you have requested
  3. 0.5% of your corresponding earnings for the withdrawal is charged as a service fee, in this case, 0.01 DAI is charged
  • Withdraw partial earnings
  1. You input the withdraw amount, i.e. 50 DAI
  2. Upon confirmation, we transfer the underlying 98 cDAI (based on the exchange rate on that day) to Compound in order to withdraw the 50 DAI you have requested
  3. 0.5% of your corresponding earnings for the withdrawal is charged as service fee, in this case, 0.0049 DAI is charged

Does Crypto.com charge a fee to deposit/withdraw to/from Compound Lending?

Crypto.com charges a 0.5% service fee on the corresponding earnings for each withdrawal from Compound Lending. The fee is used to supplement the operational costs and risks associated with managing DeFi services, and bringing more DeFi projects to you.

Please note that Compound Lending is an Ethereum-based protocol and each deposit or withdrawal request incurs network fee in ETH.

Hence, we advise you to only withdraw your Compound assets + interest when you have earned enough to cover the network fee.

How do I receive COMP for using Compound Lending?

You automatically accumulate COMP by depositing to Compound. Once you have earned over 0.001 COMP, it will be distributed to your wallet the next time you make a deposit or withdrawal with Compound. The amount of COMP you will earn each day is proportional to how much is invested by you and everyone else using the protocol. View here to learn more about COMP distribution.

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