Compound is a decentralized finance (DeFi) lending protocol that enables users to generate interest on their cryptocurrencies by placing them into one of several pools supported by the platform. When a user deposits tokens into a Compound pool, they receive cTokens in return. These cTokens represent the user's share in the pool and can be redeemed for the underlying cryptocurrency originally deposited into the pool at any time. For instance, depositing ETH into a pool yields cETH. Over time, the exchange rate of these cTokens to the underlying asset increases, resulting in a greater amount of the underlying asset upon redemption — this constitutes the interest distribution mechanism. Conversely, borrowers can obtain secured loans from any Compound pool by providing collateral. The maximum loan-to-value (LTV) ratio varies depending on the collateral asset, typically ranging from 50 to 75%. The interest rate paid is determined by the borrowed asset, and borrowers may face automatic liquidation if their collateral value falls below a specific maintenance threshold. Since its mainnet launch in September 2018, Compound has surged in popularity, recently surpassing $800 million in total locked value.