What is Compound?

Decentralized finance (DeFi) has transformed the way individuals manage money. Among its most influential protocols, Compound holds a central place: it was one of the first to enable crypto lending and borrowing fully automated by smart contracts.

But for beginners, using Compound directly is far from simple: managing wallets, selecting rates, and understanding risks can all be overwhelming.

👉 This is where Coinstancy comes in: by integrating protocols like Compound into its app, the platform lets individuals benefit from DeFi yields without any technical complexity.

Compound: the lending and borrowing protocol

Launched in 2018, Compound paved the way for modern decentralized finance. Its principle is simple: connecting lenders and borrowers via blockchain.

• Lenders deposit their cryptocurrencies (ETH, USDC, DAI, etc.) into liquidity pools.
• In return, they receive interest on their deposits.
• Borrowers, meanwhile, deposit collateral and borrow other cryptos against fees.

All this is managed automatically by smart contracts, with no banks involved.

👉 Compound quickly became a DeFi cornerstone, with billions of dollars deposited in its pools over the years.

The advantages of Compound

Compound popularized the idea of earning yield through crypto. Its main strengths include:

• Attractive yields 📈: often higher than traditional bank rates.
• Full automation 🤖: everything managed by smart contracts, no intermediaries.
• Flexibility 🔄: funds can be deposited or withdrawn anytime.
• Solid reputation 🏛️: widely audited and used by millions of users.

These advantages made Compound a reference point in DeFi.

The limitations for individuals

Despite its strengths, Compound is not designed for the general public:

• Complexity 🤯: users need to connect a wallet, understand variable rates, and manage risks.
• Liquidation risk ⚠️: if collateral value drops too much, borrower positions can be liquidated.
• Transaction fees 💸: on Ethereum, each action can be costly due to gas fees.
• No guidance: Compound is infrastructure, not a beginner-friendly app.

👉 Result: many hear about Compound’s yields but never dare to use it directly.

Coinstancy: the bridge to Compound

This is exactly what Coinstancy solves: making protocols like Compound accessible to everyone.

• Direct integration: Coinstancy uses Compound (and other DeFi protocols) to generate yield.
• Simplified interface 📲: instead of managing wallets and rates, users just deposit stablecoins on Coinstancy and start earning.
• Enhanced security 🔒: assets are held via Fireblocks, and only reliable protocols like Compound are selected.
• No hidden fees ✅: all yields are returned to users.

In practice, Coinstancy bridges the gap between Compound’s power and the simplicity of a savings account.

Practical example: $5,000 placed via Coinstancy

Let’s imagine a user deposits $5,000 in stablecoins into a Coinstancy pool. A portion of those funds may be allocated to Compound to generate yield.

• With an average rate of 6–7% annually, that’s around $300–$350 in passive income.
• Interest accrues continuously and is visible directly in the app.
• The user doesn’t worry about liquidation risks or gas fees: Coinstancy handles it all.

👉 The experience is much smoother than going directly to Compound.

Why choose Coinstancy instead of Compound directly?

The question is: why use Coinstancy if you can go directly to Compound?

Because Coinstancy:

• Removes technical complexity.
• Protects users by selecting secure protocols.
• Offers a clear, educational interface.
• Grants access to Compound yields without needing to understand its inner workings.

In short, Coinstancy democratizes Compound for everyone.

Conclusion

Compound is one of DeFi’s founding protocols, pioneering automated lending and borrowing. But using it directly remains a task for advanced users.

👉 With Coinstancy, anyone can benefit from Compound (and other protocols) through a simple, secure, and intuitive app.

💡 It’s the easiest way to access DeFi’s power—without its complications.

Frequently asked 🤔

What is Compound?

Compound is a decentralized finance protocol that allows crypto lending and borrowing through smart contracts.

What assets can be deposited on Compound?

Users can deposit cryptos like ETH, DAI, USDC, USDT, and more. These deposits earn interest depending on supply and demand.

What are the risks of Compound?

The main risk is borrower liquidation if collateral drops too quickly. There are also smart contract risks, though Compound has been widely audited.

How does Coinstancy use Compound?

Coinstancy integrates Compound among its partner protocols. Users simply deposit stablecoins, and Coinstancy allocates part of the funds to Compound to generate yield.

Why go through Coinstancy instead of Compound directly?

Because Coinstancy simplifies everything: no complex wallet setup, no gas fees to manage, no collateral monitoring. Everything is automated and accessible in one app.