Lenders deposit funds into Compound and receive interest payments from borrowers (supply-side fees).

Compound is a non-custodial lending protocol built on Ethereum. Compound was founded by Robert Leshner & Geoffrey Hayes and launched in 2017.

 COMP tokenholders own and govern the protocol. They currently take a cut of the total interest paid by borrowers (revenue). Compound’s investors include a16z, Paradigm, Polychain, etc.

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Lending

Compound

# Compound Token incentives Methodology

## 1. Overview

Token incentives measures the daily USD value of reward tokens distributed to users on the Compound protocol for participating in lending and borrowing activities. This metric captures the protocol's spending on user acquisition and retention through direct token rewards. The calculation aggregates incentive distribution events from both Compound v2 (Ethereum) and v3 (multi-chain) deployments, converts amounts to USD, and provides daily totals across all supported chains.

## 2. Data sources

- **Compound v2 events**: Parsed Ethereum `DistributedBorrowerComp` and `DistributedSupplierComp` events from the Comptroller contract, tracking COMP token distributions to borrowers and suppliers
- **Compound v3 events**: Parsed `RewardClaimed` events from CometRewards contracts across Ethereum, Arbitrum, Base, and Polygon, tracking various reward token distributions
- **External data**: End-of-day token price feeds for USD conversion and token metadata for decimal corrections
- **Blockchain data**: Ethereum, Arbitrum, Base, and Polygon transaction logs containing the reward distribution events

## 3. Step-by-step calculation

### Component A: Compound v2 token incentives
- **Purpose**: Captures COMP token distributions on Ethereum for Compound v2 protocol
- **Logic**: Extracts `DistributedBorrowerComp` and `DistributedSupplierComp` events from the Comptroller contract. Each event contains the recipient address and the amount of COMP tokens distributed. All distributions use the hardcoded COMP token address and are classified under the lending business line with v2 version identifier. The `compDelta` field provides the raw token amount distributed.
- **Key fields**: `address` (recipient), `compDelta` (COMP amount), plus block timestamp and transaction metadata for event identification

### Component B: Compound v3 token incentives  
- **Purpose**: Captures reward token distributions across multiple chains for Compound v3 protocol
- **Logic**: Extracts `RewardClaimed` events from CometRewards contracts deployed on Ethereum, Arbitrum, Base, and Polygon. Unlike v2 which only distributes COMP, v3 can distribute various reward tokens as specified in each event. Each event contains the recipient address, reward token address, and distribution amount. Events are classified under the lending business line with v3 version identifier and appropriate chain identification.
- **Key fields**: `address` (recipient), `token` (reward token address), `amount` (token amount), plus block timestamp and transaction metadata

### Component C: Hack exclusion logic
- **Purpose**: Excludes compromised reward distributions during a known security incident
- **Logic**: Applies a hardcoded date filter that sets all token incentive amounts to zero for events occurring between 2021-09-28 00:00:00 UTC and 2021-10-10 00:00:00 UTC. This prevents inflated metrics during the period when reward contracts were compromised and abnormal distributions occurred.
- **Key fields**: Uses `block_timestamp` to identify affected events and overrides `amount` values with zero

### Final aggregation
- **Combining components**: Unions v2 and v3 event data into a single dataset, maintaining chain and version distinctions while standardizing the schema structure
- **Currency conversion**: Converts raw token amounts to USD using end-of-day price feeds matched by token address and event date. Applies decimal corrections based on each token's metadata to ensure proper unit conversion from blockchain integers to human-readable amounts
- **Time aggregation**: Truncates event timestamps to daily boundaries and aggregates total incentive amounts by day, chain, account address, and token
- **Final calculation**: Sums the USD-converted daily incentive amounts across all tokens and events, applying forward-fill logic to ensure complete daily time series with zero values for days without distributions

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Value of native tokens distributed as incentives.

CompoundCOMP

Token incentives

Token incentives

Competitive landscape

Chain breakdown