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

Introduction to Locking TON Tokens on Compound

Locking TON tokens on Compound Finance lets you earn passive income through interest while contributing to DeFi liquidity. This step-by-step guide simplifies the process for beginners, covering wallet setup, token bridging, and Compound protocol interaction. Whether you’re staking for yield or preparing for borrowing, understanding how to lock TON tokens properly maximizes your crypto earnings.

Prerequisites Before Locking TON on Compound

Prepare these essentials:

1. TON Tokens: Acquire TON (The Open Network tokens) from exchanges like OKX or Bybit
2. Ethereum Wallet: Install MetaMask or Trust Wallet with ETH for gas fees
3. Bridged wTON: Convert native TON to wrapped ERC-20 version (wTON) via cross-chain bridges
4. Compound Account: Create an account at app.compound.finance
5. Gas Funds: Maintain 0.05-0.1 ETH for transaction fees

Step-by-Step: How to Lock TON Tokens on Compound

Step 1: Bridge TON to Ethereum Network

1. Visit a TON-Ethereum bridge (e.g., Orbit Bridge or official TON Bridge)
2. Connect your wallet and select TON → Ethereum transfer
3. Enter TON amount and confirm to receive wTON in your Ethereum wallet

Step 2: Connect Wallet to Compound

1. Go to app.compound.finance
2. Click “Connect Wallet” and choose your wallet provider
3. Authorize connection in your wallet pop-up

Step 3: Supply wTON to Compound

1. Select “Supply” from Compound dashboard
2. Search and select wTON from asset list
3. Enter amount to lock and click “Supply”
4. Confirm transaction in your wallet (pay gas fee)

Step 4: Enable Collateral (Optional)

1. Navigate to “Dashboard” → “Your Supplies”
2. Toggle “Use as Collateral” next to wTON
3. Confirm transaction to activate borrowing power

Managing Your Locked TON Position

• Track Interest: View accrued COMP tokens and interest in “Dashboard”
• Withdraw Funds: Select “Withdraw” under wTON (partial/full amounts)
• Adjust Collateral: Modify collateralization ratio in “Borrow” section
• Compound Earnings: Reinvest interest manually for compounded growth

Key Benefits of Locking TON on Compound

1. Earn Interest: Get variable APY on locked wTON (typically 2-8%)
2. Borrowing Power: Use wTON as collateral for stablecoin loans
3. Liquidity Mining: Qualify for COMP token rewards
4. DeFi Integration: Leverage wTON across Ethereum’s ecosystem

Risks and Security Considerations

• Smart Contract Risk: Audited but not risk-free
• Bridging Fees: Double gas costs (bridge + Compound)
• Collateral Liquidation: Borrowing may trigger loss if value drops
• Wallet Security: Never share seed phrases; verify contract addresses

Frequently Asked Questions (FAQ)

Can I lock native TON directly on Compound?

No. You must bridge TON to Ethereum as ERC-20 wTON first since Compound operates on Ethereum.

What’s the minimum TON required to lock?

No strict minimum, but ensure sufficient ETH for gas fees (0.03 ETH+ recommended).

How often is interest paid?

Interest accrues continuously and compounds every Ethereum block (~13 seconds).

Can I unlock tokens anytime?

Yes! Withdrawals are instant unless used as collateral for active loans.

Is locking TON on Compound taxable?

Interest earnings are typically taxable events. Consult a crypto tax professional.

What happens if Compound gets hacked?

Protocol insurance funds may cover losses, but user funds aren’t FDIC-insured.

Conclusion

Locking TON tokens on Compound unlocks DeFi opportunities through a straightforward four-step process: bridge, connect, supply, and manage. By converting TON to wTON and interacting with Compound’s battle-tested protocol, you transform idle assets into productive capital. Always verify contract addresses, monitor collateral health, and start with small amounts to safely navigate this powerful wealth-building strategy.