Aave vs Compound: Lending APY, Security and Chains Compared
By DifiCalc Research Team · Published Sep 10, 2026 · Reviewed Sep 10, 2026
TL;DR — the quick verdict. These are the two highest-grade money markets in DeFi — both rated A+ — and rates on the same blue-chip assets are usually within a fraction of a percent. Aave wins on reach and features: about $12.8B TVL, seven chains, more listed assets, flash loans and efficiency modes. Compound wins on simplicity and governance purity: about $8.9B, Ethereum and Polygon, one conservative interest-rate model and COMP incentives. Default to Aave unless you specifically want Compound's minimalism or COMP rewards.
| Aave | Compound | |
|---|---|---|
| Founded | 2017 | 2018 |
| TVL (reviewed Sep 2026) | ≈ $12.8B | ≈ $8.9B |
| Chains | Ethereum, Polygon, Arbitrum, Optimism, Base, Avalanche, BSC | Ethereum, Polygon |
| Audits | 4 public audits | 3 public audits |
| Fee model | Reserve factor ~10–15%; rates set per market by utilization | Reserve factor ~10–15%; algorithmic utilization curve |
| Typical supply APY | ~1.5–15% across markets, ~4.5% typical on blue chips | ~1.2–13% across markets, ~3.8% typical on blue chips |
| Token incentives | Optional safety-module staking rewards | COMP rewards to suppliers/borrowers |
| DifiCalc risk grade | A+ | A+ |
| Full review | Aave review | Compound review |
TVL and APY figures reviewed Sep 10, 2026 against live data and protocol documentation; rates move daily — verify current numbers before depositing. See our review methodology.
How lending rates work on both
Both protocols price loans by utilization: when a pool is heavily borrowed, supply APY rises to attract liquidity; when it is idle, rates fall. Aave sets parameters per market and supports a wider range of interest-rate strategies (including isolated and efficiency modes), while Compound's newer architecture uses a smaller set of tightly governed markets.
For USDC and USDC-type assets on Ethereum, sustainable supply rates in September 2026 sit in the mid-single digits on both. The stablecoin APY tracker shows the live spread, which changes with utilization every block.
Chains, assets and features
Aave is deployed on seven chains and lists more long-tail collateral, which matters if you want to supply or borrow against an asset that is only liquid on an L2. It also offers flash loans and efficiency (E-mode) for correlated-asset leverage.
Compound deliberately stays narrow — Ethereum and Polygon, a conservative asset list, and a governance process famous for transparency. That narrowness reduces attack surface but means you may need bridges or other venues for L2-native activity.
Security and risk profile
Both have existed since the early lending era, carry three or four public audits and top-tier TVL, and earn A+ under our scoring methodology. Aave scores higher on raw TVL depth and chain diversification; Compound's smaller surface area is itself a risk reducer.
The main user risk on both is liquidation: borrowers must keep collateralization above protocol minimums, and rate spikes can trigger repayments. Neither return is guaranteed, and COMP or staking rewards are token emissions whose dollar value fluctuates.
Who should choose which
- Choose Aave as the default: deepest liquidity, most chains and assets, flash loans and E-mode, and the broadest institutional adoption.
- Choose Compound if you want the simplest conservative interface, Ethereum/Polygon only, and COMP rewards on your supply or borrow activity.
- Rate shoppers should compare the same asset on the same chain at deposit time — the leader flips with utilization.
How to choose in 4 steps
- Pick the asset and chain you actually use — a rate on Aave Arbitrum is not directly comparable to Compound Ethereum after bridge costs.
- Check current supply APY and utilization live; rates move with borrowing demand.
- Separate base interest from token rewards (COMP or safety-module emissions) and stress-test the reward token at a lower price.
- If borrowing, set a collateralization buffer well above the liquidation threshold and monitor rate spikes with the tracker.
Frequently asked questions
Is Aave safer than Compound?
Both earn our A+ grade: Aave has more audits (4 vs 3), larger TVL and wider deployment, while Compound has a smaller, more conservative asset surface. Neither has ever suffered a protocol-wide loss of supplied funds, but liquidation risk for borrowers exists on both.
Why does the same stablecoin show different APY on the two protocols?
Supply APY is a function of utilization. If Aave's USDC pool is 85% borrowed and Compound's is 60%, Aave pays more at that moment. The spread flips regularly; check the live tracker at deposit time rather than trusting a static ranking.
Are COMP rewards free extra yield?
COMP rewards are token emissions with real market value when claimed, but that value is volatile and may be taxable. Treat them as a bonus on top of base interest, not as a permanent rate — emission programs have been reduced before.
Can my deposit be locked?
Supplying is open and withdrawal is instant while the pool has liquidity; at extreme utilization, withdrawals may temporarily wait until loans are repaid or rates attract suppliers — a standard money-market design shared by both protocols.
Which is better for borrowing?
Aave offers more collateral types, E-mode for correlated assets and flash loans. Compound offers fewer markets and a simpler experience, mainly on Ethereum and Polygon. Compare borrow APR and liquidation thresholds for your specific collateral before choosing.