Aave and Compound DeFi Risk Research
By Asan Tulemis, 22 October 2021
Executive Summary
This report is a comparative analysis of the Compound and Aave protocols. We assessed profitability and risk metrics of both. The report assesses characteristics from three different perspectives
token holders,
depositors, and
borrowers
Section 1 - covers investment metrics, specifically net interest margin (NIM) and annualized rate of return, in other words, yield associated with investment into the protocol.
Section 2 - covers risk metrics including market risk, liquidity risk, and operational risk. Credit risk is out of scope. Based on the conducted analysis, Aave showed better results compared to Compound, subject to a disclaimer.
Context
This report was commissioned by Coinshift.
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