Aave vs Compound for Treasury Lending

Advanced risk management tools: Features like e-Mode for correlated assets and isolation mode for new listings. This matters for sophisticated treasuries seeking higher capital efficiency and controlled exposure to volatile assets.

Largest multi-chain TVL: Deployed natively on Ethereum, Polygon, Avalanche, and others via the Aave V3 architecture. This matters for protocols with assets spread across multiple ecosystems needing a unified liquidity strategy.

Transparent, formulaic interest model: Rates are determined by a clear utilization curve. This matters for conservative treasuries that prioritize predictable borrowing costs and a straightforward, audited codebase without complex governance-triggered parameters.

Pioneering on-chain governance: COMP token holders directly control all protocol upgrades via Compound Governance. This matters for DAO treasuries that value maximum decentralization and censorship resistance over rapid feature iteration.

• Multi-chain treasury operations
• Access to a wider range of assets (including LP tokens via GHO integration)
• Advanced risk features like high-efficiency borrowing pools (e-Mode)
• Institutional-grade risk frameworks (Gauntlet, Chaos Labs)

• Maximum protocol simplicity and auditability
• Predictable, non-governance-adjusted interest rates
• A pure focus on core lending/borrowing without additional product layers
• A benchmark for decentralized on-chain governance

Specific advantage: Aave V3's eMode and isolation mode allow for higher LTVs on correlated assets (e.g., 97% for stables) and controlled risk exposure. This matters for treasuries looking to maximize yield on a core asset basket without over-collateralizing.

Specific advantage: Advanced features come with higher contract complexity and ~20-30% higher gas costs for core interactions versus Compound V3. This matters for treasuries executing frequent, large-volume operations where gas fees materially impact net yield, especially on Ethereum Mainnet.

Specific advantage: Streamlined V3 architecture results in lower and more predictable gas costs and straightforward risk parameter management. This matters for automated treasury ops (e.g., via Gnosis Safe scripts) where cost certainty and execution reliability are prioritized over feature breadth.

Specific advantage: Compound's conservative governance has led to a slower feature rollout (e.g., no native cross-chain solution) and fewer chain deployments than Aave. This matters for treasuries operating on L2s like Arbitrum or Polygon, where Aave's liquidity and feature set are often more mature.

Uniform collateral factor model: All assets in a pool share the same Loan-to-Value (LTV) ratio, simplifying risk modeling. This matters for treasuries managing a concentrated portfolio of high-quality assets (e.g., ETH, WBTC) where maximizing borrowing power against a few assets is the priority.

Direct COMP token governance: Treasury teams can participate directly in protocol parameter votes (e.g., collateral factors, interest rate models). This matters for large holders who want a direct say in the evolution of the protocol they depend on, unlike Aave's more complex multi-governance structure.

Restrictive listing process: New asset integrations require a formal governance proposal and a lengthy security audit period. This matters for treasuries looking to leverage a diverse, long-tail asset portfolio (e.g., LRTs, Real World Assets) where Aave's permissionless listing via GHO facilitators or Aave Arc provides faster access.

No native stablecoin or advanced features: Lacks a native yield-bearing stablecoin like Aave's GHO and advanced risk features like eMode (high-efficiency correlated asset borrowing). This matters for treasuries seeking sophisticated yield strategies or efficient stablecoin minting directly within the protocol.