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

What Does Locking TON Tokens on Compound Achieve?

Locking TON (The Open Network) tokens on Compound allows you to earn passive interest by supplying liquidity to the protocol. As a decentralized lending platform, Compound uses your deposited tokens to facilitate loans for other users, rewarding you with variable APY (Annual Percentage Yield) in return. This process turns idle TON holdings into productive assets while maintaining full ownership.

Prerequisites Before Locking TON

• TON Tokens: Minimum 50 TON recommended for cost efficiency
• Ethereum Wallet: MetaMask or WalletConnect-compatible wallet
• Bridged wTON: TON must be converted to wrapped TON (wTON) via a cross-chain bridge
• ETH for Gas: 0.02-0.05 ETH to cover transaction fees
• Compound Account: Registered at app.compound.finance

Step-by-Step: Locking TON on Compound

1. Bridge TON to Ethereum Network
   • Visit a TON-Ethereum bridge like everscale.network/bridge
   • Connect your TON wallet and Ethereum wallet
   • Specify TON amount and convert to wTON (wrapped ERC-20 token)
   • Confirm transaction (5-15 minute processing time)
2. Connect Wallet to Compound
   • Navigate to app.compound.finance
   • Click “Connect Wallet” and choose your provider (e.g., MetaMask)
   • Authorize connection in your wallet pop-up
3. Supply wTON to Compound
   • In the “Supply Markets” section, locate wTON (may appear as WTON)
   • Click “Supply” and enter your wTON amount
   • Review interest rate (current APY displayed)
   • Approve contract interaction in your wallet
4. Confirm and Monitor
   • Execute the supply transaction (gas fee required)
   • Track accrued interest in your Compound dashboard
   • Use “cTokens” (cWTON) as proof of your supplied balance

Key Benefits of Locking TON on Compound

• Interest Earnings: Earn variable APY (typically 2-8% for stablecoins)
• Liquidity Access: Withdraw funds anytime without lockup periods
• Collateral Utility: Use supplied wTON as collateral for borrowing
• Decentralized Security: Non-custodial protocol audited by top firms

Critical Risks to Consider

• Smart Contract Vulnerabilities: Though audited, exploits remain possible
• Bridge Risks: Cross-chain transfers add counterparty risk
• Interest Rate Volatility: APY fluctuates based on market demand
• Impermanent Loss: Potential if supplying to liquidity pools (not applicable to simple lending)

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 primarily on Ethereum. Use trusted bridges like the official Everscale Bridge.

How often is interest paid on locked TON?

Interest compounds every Ethereum block (~15 seconds). You earn cTokens representing your growing balance, redeemable anytime.

What’s the minimum TON required?

No strict minimum, but consider gas costs. Locking under 50 TON may be uneconomical due to Ethereum transaction fees.

Can I borrow against locked TON?

Yes. Supplied wTON becomes collateral, allowing you to borrow up to 50-75% of its value in supported assets like USDC or ETH.

Is there a withdrawal fee?

Compound charges no fees, but Ethereum gas fees apply for all transactions including withdrawals.

Pro Tips for Optimal Results

• Monitor gas fees using tools like Etherscan Gas Tracker to save 20-60% on transactions
• Enable Compound’s “Safety Module” for additional yield (requires COMP token staking)
• Diversify across multiple protocols (Aave, Curve) to mitigate platform-specific risks
• Always verify contract addresses to avoid phishing scams

By following this guide, you’ve transformed static TON holdings into interest-generating assets. Remember that DeFi involves inherent risks—only lock funds you can afford to temporarily immobilize. Check Compound’s official documentation for real-time supported assets and rate updates as protocol upgrades may affect wTON compatibility.