How to Deposit Cardano on Compound: Step-by-Step Guide (2023)

Want to earn interest on your Cardano (ADA) holdings? While Compound Finance doesn’t natively support ADA, this guide reveals a proven workaround to deposit Cardano on Compound using wrapped tokens. Follow our step-by-step instructions to safely bridge ADA to Ethereum and start earning yields today.

Why Deposit Cardano on Compound?

Compound is a leading decentralized lending protocol where users earn interest by supplying crypto assets. Though ADA isn’t directly supported, converting it to wrapped tokens unlocks:

• Passive income from lending yields (currently 2-5% APY for stablecoins)
• Liquidity access for borrowing against your holdings
• Ecosystem integration with Ethereum DeFi tools

Prerequisites Before Starting

• Cardano Wallet: Yoroi, Daedalus, or Nami with ADA
• Ethereum Wallet: MetaMask (with ETH for gas fees)
• Bridge Account: Multichain.org or RenBridge setup
• Minimum 50 ADA: Recommended for cost efficiency

Step-by-Step: How to Deposit Cardano on Compound

Step 1: Bridge ADA to Ethereum

1. Go to Multichain.org and connect wallets
2. Select “Cardano” as source chain and “Ethereum” as destination
3. Enter ADA amount (minimum 20 ADA)
4. Confirm transactions in both wallets (takes ~15 minutes)
5. Receive wrapped ADA (wADA) in MetaMask

Step 2: Swap wADA for Compound-Supported Assets

1. Visit Uniswap or SushiSwap
2. Connect MetaMask
3. Swap wADA for:
   • DAI (recommended for stable yields)
   • USDC
   • ETH
4. Confirm swap and pay gas fees

Step 3: Deposit Assets into Compound

1. Go to Compound Finance App
2. Connect MetaMask
3. Select “Supply” tab
4. Choose asset (DAI/USDC/ETH)
5. Enter amount and click “Supply”
6. Approve contract + confirm transaction

Step 4: Manage Your Deposit

• Track interest accrual in “Dashboard”
• Withdraw anytime (takes 1 Ethereum block)
• Use supplied assets as collateral for loans

Key Considerations

• Fees: Expect $10-$50 in ETH gas + 0.1% bridge fee
• Risks: Smart contract vulnerabilities, bridge risks, impermanent loss during swaps
• Tax Implications: Swapping ADA→wADA→DAI may trigger taxable events

Frequently Asked Questions (FAQ)

Can I deposit ADA directly to Compound?

No. Compound only supports Ethereum-based assets. You must convert ADA to wrapped tokens first.

What’s the cheapest bridge for ADA?

Multichain typically offers lowest fees (0.1%), while RenBridge charges 0.3%. Compare rates before bridging.

How long does bridging take?

Cardano→Ethereum transfers take 10-25 minutes depending on network congestion.

Can I avoid swapping to stablecoins?

Yes, but only if you deposit ETH. Compound doesn’t support wADA directly.

Is my ADA safe during bridging?

Reputable bridges use audited smart contracts, but always verify contract addresses and use official links.

What are Compound’s withdrawal limits?

No limits! Withdraw anytime, though Ethereum gas fees apply.

Are there Cardano-native alternatives?

Yes! Consider Aada Finance or Liqwid on Cardano for direct ADA lending without bridging.

By following this guide, you’ve unlocked Ethereum DeFi opportunities for your Cardano holdings. Always verify contract addresses, monitor gas fees, and start with small test transactions. Happy yield farming!