Aave vs Compound

Overview

Aave and Compound are the two dominant lending protocols in DeFi, together accounting for over $12B in total value locked. Both allow users to lend and borrow crypto assets, but they differ significantly in features, network availability, and user experience.

This comparison will help you decide which protocol is right for your needs.

Head-to-Head Comparison

Total Value Locked & Adoption

Network Availability

• Ethereum mainnet
• Arbitrum, Optimism, Base (L2s)
• Polygon, Avalanche
• Metis, Scroll

• Ethereum mainnet
• Base
• Arbitrum
• Polygon

Unique Features

• Flash Loans: Borrow without collateral if repaid in same transaction
• Stable Rates: Lock in a predictable borrowing rate
• Credit Delegation: Let trusted addresses borrow against your collateral
• E-Mode: Higher efficiency for correlated assets

• Simpler Interface: More straightforward UX
• Compound III (Comet): New single-asset collateral design
• COMP Rewards: Governance token distribution to users

Interest Rates Comparison

Both protocols use algorithmic rates based on utilization. In practice:

• Supply rates: Usually comparable, Aave slightly higher on average
• Borrow rates: Compound sometimes lower due to COMP subsidies
• Stable vs Variable: Only Aave offers stable (fixed) borrow rates

Security Track Record

• 15+ security audits
• $250K bug bounty
• No major exploits on core protocol
• Safety Module with $400M+ staked AAVE

• Multiple audits since 2018
• Bug bounty program
• One notable incident (COMP distribution bug, 2021)
• Longer operational history

When to Choose Aave

1. You need multi-chain access - Aave supports more L2s
2. You want flash loans - Only available on Aave
3. You prefer stable rates - Lock in predictable costs
4. You're moving large amounts - Deeper liquidity
5. You want to use LSTs as collateral - Better E-Mode efficiency

When to Choose Compound

1. You value simplicity - Cleaner interface
2. You're on Base - Strong Compound presence
3. You want COMP rewards - Additional yield
4. You prefer single-collateral vaults - Compound III design
5. You value the longest track record - Operating since 2018

Using Both Protocols

Many DeFi users use both protocols strategically:

• Compare rates before each deposit
• Use Aave for multi-asset positions
• Use Compound for Base-focused strategies
• Diversify across both to reduce protocol risk

Migration Guide

1. Withdraw your cTokens from Compound
2. Visit Aave on your preferred network
3. Supply the same assets
4. Receive aTokens

1. Withdraw from Aave (burn aTokens)
2. Visit Compound
3. Supply assets and receive cTokens

Compare rates across both protocols with Fensory. Track your lending positions and find the best yields in one dashboard.

Risk Considerations

Both protocols are battle-tested but carry inherent DeFi risks:

• Smart Contract Risk: Despite extensive audits, vulnerabilities may exist
• Liquidation Risk: Borrowed positions can be liquidated if collateral drops
• Oracle Risk: Both rely on price oracles that could malfunction
• Utilization Risk: High utilization can prevent immediate withdrawals

Frequently Asked Questions

Rates fluctuate based on utilization. Aave often has slightly higher supply APY due to larger TVL, but Compound's COMP rewards can offset the difference. Check both before depositing.

Absolutely. Many users diversify across both to reduce protocol risk and optimize for the best rates on different assets.

Both have strong security records with multiple audits. Compound has operated longer (since 2018), while Aave has larger TVL and more features. Neither has suffered a major exploit on core lending.

For positions under $10,000, use L2 deployments to save on gas. Both protocols offer full functionality on Arbitrum, Optimism, and Base.

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