Compound V3 (Comet) Guide 2026: Single-Asset Borrowing and How It Compares to Aave
Compound V3 rearchitected DeFi lending with Comet: each market is isolated, with a single borrowable asset (USDC). Here is how Compound V3 works and when to use it over Aave.
Compound V3 (known as "Comet") made a significant architectural departure from V2 and from Aave: each market supports only one base borrowable asset, making the protocol simpler and safer. In 2026, Compound V3 has $3B+ TVL with USDC as the primary borrowable asset.
Comet Architecture: How It Differs from V2/Aave
- Single borrowable asset per market: borrow USDC, supply various collaterals
- No cross-collateral risk: collateral for ETH market is isolated from WBTC market
- Simplified liquidation: cleaner process reduces bad debt risk
- USDC supplier receives supply APY automatically without separate claim transaction
Compound V3 vs. Aave V3: When to Use Each
- Use Compound V3: borrowing USDC against ETH/WBTC; cleaner risk model
- Use Aave V3: accessing multiple borrow assets; using e-mode for correlated collateral; cross-chain needs
- Both protocols: competitive rates; check Morpho for best P2P rates on top of both
COMP Token and Governance
COMP token holders govern Compound protocol parameters. The Compound DAO is one of DeFi's most active governance communities. The protocol generates revenue from the spread between supply and borrow rates, with COMP distributed as liquidity incentives — though emissions have been substantially reduced from 2020 peak levels.