What Is Compound and Why Deposit Tokens?
Compound is a leading decentralized finance (DeFi) protocol enabling users to lend and borrow cryptocurrencies. By depositing tokens on Compound, you earn interest in real-time through algorithmic rate adjustments. This guide explains how to securely deposit tokens (often referred to as “deposit ton” in crypto slang) to maximize yields.
Step-by-Step: How to Deposit Tokens on Compound
- Connect Your Wallet: Use MetaMask, Coinbase Wallet, or other Web3 wallets compatible with Ethereum.
- Navigate to Compound App: Visit app.compound.finance and select “Supply” from the dashboard.
- Choose Token: Select from supported assets like ETH, USDC, DAI, or WBTC. Note: “TON” (Toncoin) isn’t natively supported.
- Approve & Deposit: Authorize the contract, enter the amount, and confirm the transaction. Gas fees apply.
- Track Earnings: Monitor accrued interest in your dashboard, compounded every Ethereum block (~13 seconds).
Top Tokens to Deposit on Compound
- Stablecoins (USDC, DAI): Lower volatility, predictable APY
- Ethereum (ETH): Earn interest while holding
- Wrapped Bitcoin (WBTC): Bitcoin exposure with DeFi benefits
- Compound’s native token (COMP): Additional governance rights
Benefits of Depositing on Compound
Depositing tokens unlocks unique advantages:
- Passive Income: Earn up to 5% APY on stablecoins and 1-3% on ETH.
- Liquidity: Withdraw funds anytime without lock-up periods.
- Collateral Utility: Borrow against deposits for leveraged strategies.
- Decentralization: No intermediaries or credit checks.
Risks to Consider Before Depositing
- Smart Contract Vulnerabilities: Audited but not risk-free
- Impermanent Loss: If supplying liquidity pools (not basic deposits)
- Market Volatility: Asset values fluctuate while deposited
- Gas Fees: Ethereum network costs for transactions
FAQ: Depositing Tokens on Compound
Can I deposit “TON” (Toncoin) on Compound?
No. Compound supports Ethereum-based tokens only. Toncoin operates on its own blockchain. Use bridges or exchanges to convert TON to supported assets like USDC first.
How often is interest paid?
Interest compounds every Ethereum block (approx. 13 seconds), with APY updating based on market demand.
Is there a minimum deposit?
No minimum, but gas fees make small deposits impractical. Aim for $100+ in value.
Can I lose my deposited tokens?
Only via smart contract exploits or if borrowed assets exceed collateral value during market crashes.
Are deposits insured?
No FDIC insurance. Compound is non-custodial—you control your assets.
Maximizing Your Compound Deposits
Boost returns by:
- Monitoring rates daily—APYs change with market activity
- Using deposited assets as collateral for low-cost borrowing
- Reinvesting earned interest into high-yield tokens
Always verify contract addresses and use official Compound resources to avoid scams. Start small to test the process before larger deposits.
