Compound V3 has launched on the Arbitrum network, offering users a streamlined method to earn yields on their USDC holdings directly on-chain. This guide covers how the protocol works, its benefits, and how you can get started.
What Is Compound V3?
Compound V3 is an Ethereum Virtual Machine (EVM) compatible protocol that enables users to supply cryptocurrency assets as collateral to borrow against or to provide liquidity and earn interest. Users can deposit the base asset, USDC, to generate a yield directly from the protocol’s lending activity.
How Earnings Work on Compound V3
When you deposit USDC into Compound V3 on Arbitrum, you benefit from two primary forms of return:
- Deposit Interest: Earn interest on the USDC you supply. This interest accrues continuously and is distributed when you redeem your principal.
- COMP Token Rewards: COMP is the native governance token of the Compound protocol. By supplying liquidity, you earn additional COMP incentives distributed every 7 days directly to your account.
- Limited-Time ARB Rewards: A special promotion offers a shared pool of 100,000 ARB tokens for users participating through supported platforms. These rewards are distributed daily.
Key Features of This On-Chain Earn Product
- No Maximum Limit: Users can deposit as much USDC as they wish.
- True On-Chain Yields: All returns are generated and paid based on real, transparent blockchain operations.
- Simplified User Experience: The process is designed to be intuitive, reducing the complexity typically associated with DeFi interactions.
How to Participate and Start Earning
You can easily begin earning with Compound V3 (Arbitrum) – USDC using the following pathways:
- Web Platform: Navigate to the Finance section, select 'Earn', then choose 'On-Chain Earn'. Search for USDC and select the Compound V3 (Arbitrum) option to begin.
- Mobile App: Access the 'Finance' category, tap 'Earn', then 'On-Chain Earn'. Search for USDC and select the relevant product to start.
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Frequently Asked Questions
What is the difference between deposit interest and token rewards?
Deposit interest is paid in the same asset you deposit (USDC) and is compounded over time. Token rewards like COMP and ARB are bonus incentives distributed on a set schedule, providing additional yield on top of the base interest.
How often are rewards distributed?
COMP token rewards are distributed every 7 days. The special ARB token rewards from the promotion are distributed daily. Base USDC interest accrues continuously and is claimable upon redemption.
Is there a lock-up period or minimum amount?
There is no mandatory lock-up period; you can redeem your principal plus accrued interest at any time, subject to the protocol's real-time liquidity. Always check the product page for the latest details on minimums and redemption processing times.
What are the risks involved?
This product interacts directly with decentralized protocols on Arbitrum. While the interface simplifies the process, users are exposed to smart contract risks, market volatility, and protocol-specific mechanics. Always understand the mechanics, including redemption rules and reward distribution, before participating.
Important Disclaimer Considerations
Participation in on-chain earn products requires an understanding of the underlying decentralized finance (DeFi) mechanisms. Key details such as redemption rules, reward schedules, accrual periods, and annual percentage yield (APY) estimates can vary and should be reviewed on the product page prior to committing funds. A portion of the yield is collected as a service fee. This platform provides access and distribution services but is not liable for losses arising from smart contract vulnerabilities, hacking incidents, or project failures. Always conduct thorough research and ensure you are comfortable with the associated risks.