Aave vs Compound
The two largest lending protocols on Ethereum. Both let you lend and borrow crypto, but they differ in interest rate models, liquidation mechanics, features, and governance. Let's compare them interactively.
At a Glance
Aave V3
TVL$12.4B
Chains10+
Assets150+
Flash LoansOK Native
Isolation ModeOK
Gov TokenAAVE
StablecoinGHO
Compound V3
TVL$3.1B
Chains5
Assets~20
Flash LoansX
Isolation ModeOK (by design)
Gov TokenCOMP
Stablecoin-
Interest Rate Models Compared
Drag the utilization slider to see how rates differ. Aave has a steeper "kink" to discourage over-borrowing.
Aave Borrow Rate
3.2%
Compound Borrow Rate
2.8%
Aave Supply Rate
1.8%
Compound Supply Rate
1.6%
* Liquidation Mechanics
Aave
Compound
Close Factor
50% (V2) / 100% (V3 at HF < 0.95)
50% fixed
Liquidation Bonus
5-10% (per asset)
5-8% (per asset)
Health Factor
< 1.0 -> liquidatable
Shortfall > 0 -> liquidatable
Bad Debt Handling
Safety Module (stkAAVE backstop)
Reserves + COMP backstop
? Architecture Philosophy
Aave V3: Pool-Based
Single pool contract holds all assets. Users can borrow multiple assets against mixed collateral. More flexible but more complex risk.
Pool Contract
? ? ? ?
ETH USDC DAI WBTC
Compound V3: Comet (Single-Asset)
Each market borrows ONE base asset (e.g., USDC). Collateral assets are separate. Simpler risk model, easier to reason about.
USDC Comet
? ? ?
ETH v WBTC v COMP v
Collateral only - can't borrow these
Which Should You Use?
Choose Aave if:
- You want flash loans
- You need exotic collateral types
- You want to borrow multiple assets
- You're on a non-Ethereum chain
- You want GHO stablecoin minting
Choose Compound if:
- You prefer simplicity
- You want to earn COMP rewards
- You only need USDC/USDT/ETH borrowing
- You value a cleaner risk model
- You want gas-efficient operations