ShapeShift is all about making DeFi simple and accessible, and today, we’re excited to dive into one of the most popular decentralized lending platforms: Compound. If you’re looking to lend or borrow assets in a secure, decentralized environment, Compound and ShapeShift is a great combo. Even better, now you can easily enter your Compound supply positions through ShapeShift interface, making it more convenient than ever to get started.
What is the Compound Protocol?
Compound is a decentralized lending and borrowing protocol. It allows users to lend selected cryptocurrencies and earn interest or borrow against their crypto holdings by using them as collateral. The protocol pools assets together and sets interest rates based on the supply and demand for each asset.
Here’s how it works: When you supply an asset to Compound, it gets pooled with other deposits into a larger liquidity pool. In return for supplying your assets, Compound gives you cTokens, which represent your share of the pool. These cTokens earn interest over time, so you can passively earn rewards by holding them.
Once you’ve supplied assets to Compound, you can use them as collateral to borrow other assets. The protocol uses an overcollateralization model, meaning you can’t borrow more than you’ve supplied, keeping things secure and minimizing risk. Your collateral stays safe, but you can still access liquidity without selling your crypto.
Using ShapeShift for Compound Supply Positions
ShapeShift makes it even easier to supply assets to Compound. You can now trade and supply assets like stETH and cwstETH (Lido Finance tokens) or stablecoins directly through ShapeShift, all in one place. On ShapeShift, you can also trade LSTs and LRTs from different protocols, then supply them to Compound to earn interest. This allows you shift into DeFi strategies without needing to jump between multiple platforms.
You can also trade COMP, the governance token of Compound, directly on ShapeShift. Holding COMP gives you a say in the protocol’s future, allowing you to vote on decisions like interest rate models or protocol upgrades.
How It All Comes Together on ShapeShift
ShapeShift aims to simplify DeFi. With access to Compound, you can trade, supply, and start earning interest on your assets all in one place. You can supply Lido Finance tokens, stablecoins, or LSTs to Compound with just a single click. And once your assets are supplied, you can start earning interest or even use them as collateral to borrow more crypto.
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