When it comes to decentralized finance (DeFi), lending protocols are some of the most popular applications. In the past year or two, a number of leading protocols have emerged, each with its own strengths and weaknesses. In this article, we'll take a comprehensive look at two of the most popular DeFi lending protocols: AAVE and Compound.

We'll compare them based on four key criteria: interest rates, available networks, available tokens, and security. Let's get started!

Table of Contents

Criteria #1: AAVE vs Compound Interest Rates

When it comes to earning interest on your crypto holdings, both AAVE and Compound offer very competitive rates. On AAVE, you can currently earn up to 6% annual percentage yield (APY) on your stablecoin deposits, while on Compound you can earn up to 4% APY.

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AAVE vs Compound Compound vs AAVE
DAI
DAI
4.05% 3.84%
USDC
USDC
3.15% 2.58%
ETH
ETH
1% 0.84%
WBTC
WBTC
1% 0.40%
USDT
USDT
7.01% 3.48%
MKR
MKR
2% 1.52%
AVAX
AVAX
8.17% ‚Äď
BUSD
BUSD
0.56% 0.56%
COMP
COMP
0.01% ‚Äď
CRV
CRV
1.64% 1.62%
ENJ
ENJ
0.67% -
GUSD
GUSD
0.53% 0.43%
LINK
LINK
0.39% 0.92%
MANA
MANA
0.56% 0.56%
MATIC
MATIC
7% ‚Äď
REN
REN
0.2% 0.2%
SNX
SNX
8.58% 6%
SUSD
SUSD
2.86% 2.53%
UNI
UNI
0.3% 0.38%
YFI
YFI
0.26% 0.9%

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Visit DeFiRate for a live update.

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Criteria #2: Available Networks

AAVE is the largest multi-chain DeFi lending platform with markets across 7 different networks including Ethereum, Avalanche, Arbitrum, Optimism, Harmony, Polygon, and Fantom. The AAVE money market is also expected to be released on Solana soon with the impending release of Neon Labs' Solana EVM network.

Compound on the other hand is only available on the Ethereum (ETH) mainnet. This is a significant disadvantage when compared to AAVE that is available on various networks and is overall much more user friendly and cheaper to use.

AAVE networks and Compound
Available markets on AAVE v3 Lending.

Criteria #3: Available Coins

AAVE currently supports over 30 different types of crypto assets across 5 different networks, while Compound supports around 18 on Ethereum only. So if you're looking to deposit a wide range of coins and tokens, AAVE is the better option.

Compound Finance supply markets
Available supply markets on Compound Finance.

Criteria #4: Security

Both AAVE and Compound are built on Ethereum and leverage smart contracts for security. However, AAVE has been audited by a number of leading security firms, including Quantstamp and ConsenSys Diligence, while Compound has not. So if security is your top priority, AAVE is the better choice.

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Final Verdict: Is AAVE or Compound better?

Overall, AAVE is the superior DeFi lending platform because it offers higher crypto interest rates and more markets across a wider variety of Layer 1 and Layer 2 networks.

The AAVE platform has over double the total value of deposits compared to Compound, which highlights that it is the superior DeFi lending application for retail and institutional investors.

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