How to Lock TON Tokens on Compound: Step-by-Step Guide for Beginners

What Does Locking TON Tokens on Compound Mean?

Locking TON tokens on Compound refers to supplying your The Open Network (TON) assets to Compound Finance’s decentralized lending protocol. By doing this, you contribute to liquidity pools where borrowers can access loans while you earn interest (APY) in return. This process “locks” your tokens temporarily, making them available for decentralized finance (DeFi) activities while generating passive income.

Why Lock TON on Compound? Key Benefits

• Earn Interest: Receive variable APY paid in TON or other assets based on market demand.
• Collateral Utility: Use locked TON as collateral to borrow other cryptocurrencies.
• Liquidity Access: Support DeFi ecosystems while maintaining asset ownership.
• Decentralized Security: Compound’s audited smart contracts reduce counterparty risk.

Step-by-Step Guide to Lock TON Tokens on Compound

Prerequisites: MetaMask wallet, TON tokens, ETH for gas fees, and a Compound-supported TON wrapper (e.g., WTON).

1. Bridge TON to Ethereum: Use a cross-chain bridge (like Multichain or Celer) to convert native TON to an ERC-20 wrapped version (WTON) on Ethereum.
2. Connect Wallet: Visit app.compound.finance and link your MetaMask wallet.
3. Supply TON: Navigate to the “Supply” section, select WTON, enter the amount, and confirm the transaction. Pay ETH gas fees.
4. Enable as Collateral: Toggle “Use as Collateral” to borrow against your locked TON (optional).
5. Monitor & Manage: Track interest accrual and loan health via Compound’s dashboard.

Critical Risks and Mitigation Strategies

• Smart Contract Vulnerabilities: Only use audited bridges and protocols.
• Market Volatility: High TON price swings may trigger liquidations if used as collateral.
• Bridge Risks: Cross-chain transfers carry slippage and timing risks—use reputable bridges.
• Gas Fees: Ethereum network congestion increases costs—time transactions wisely.

Maximizing Returns on Locked TON

Boost earnings by:

• Monitoring Compound’s APY rates for optimal locking periods.
• Reinvesting earned interest into additional TON locks.
• Using collateralized loans for yield farming opportunities.
• Diversifying across multiple DeFi protocols for risk management.

Frequently Asked Questions (FAQ)

Can I lock native TON directly on Compound?

No. You must bridge TON to Ethereum as WTON (wrapped TON) since Compound operates on Ethereum. Use trusted bridges like Multichain.

How often is interest paid on locked TON?

Interest accrues continuously and compounds every Ethereum block (~15 seconds). Withdrawals include accumulated interest.

What happens if TON’s price drops sharply?

If TON is used as collateral, a significant drop may trigger liquidation. Maintain a high collateral ratio (ideally >150%) to avoid this.

Are there minimum lock amounts?

No fixed minimum, but gas fees make small locks impractical. Aim for at least 50 TON to offset costs.

How do I unlock my TON tokens?

Go to Compound’s dashboard, select “Withdraw” under your WTON position, and confirm the transaction. Tokens return to your wallet instantly.

Is locking TON on Compound safe?

While Compound is audited, risks include smart contract exploits and market volatility. Never lock more than you can afford to lose.