Compound Finance: taxation of cTokens and COMP in Spain

Compound Finance is a decentralized lending (DeFi) protocol where users can deposit assets to earn interest or borrow using collateral. Unlike Aave, Compound uses a “cToken” model that represents the deposited position plus accrued interest.

The cToken model: implicit interest

When you deposit DAI in Compound you receive cDAI:

• cDAI is not 1:1 with DAI: its value in DAI grows continuously.
• If you deposit 1,000 DAI and the exchange rate is 0.02, you receive 50,000 cDAI.
• Over time, the exchange rate rises to 0.022 → your 50,000 cDAI is worth 1,100 DAI (100 DAI interest).

There is no periodic token distribution: performance is embedded in the cToken/Token exchange rate.

cToken taxation: interpretative options

There are two interpretations:

Option A: Taxation upon withdrawal (event carried out)

• While you have cDAI, there is no income: the exchange rate goes up but you receive nothing.
• When redeeming cDAI → DAI: the difference between the DAI received and the DAI deposited = return on capital.
• This option is favorable for the taxpayer (deferral).

Option B: Periodic taxation by accumulation

• If the AEAT equates cDAI to a zero-coupon bond (implicit yield), it could require paying taxes on the accumulated interest period by period.
• This option would be comparable to accumulation funds.

Recommendation: Option A is the most reasonable by analogy with the treatment of credits with implicit interest (you do not pay taxes until you collect). Without DGT criteria, document the position adopted.

COMP: the governance token

Compound automatically distributes COMP to lenders and borrowers:

• Lender: you earn COMP in addition to the cToken APY.
• Borrower: You also earn COMP (incentive to borrow).

Taxation of COMP received:

• It is a return derived from the possession/use of the protocol → movable capital.
• Value in EUR at the time of receipt of the COMP.
• If the COMP is distributed continuously → you can make periodic claims and record each date.

Compound III (Comet): the new model

In 2022, Compound released Compound III (Comet), which simplifies the model:

• Only one base asset (USDC) can be deposited to earn interest.
• The other assets are collateral only.
• COMP rewards continue to work the same.

Fiscal: Similar to the previous model but without cTokens; Interest in USDC can be distributed directly or accumulated in the account.

Loans in Compound: the borrower's side

If you borrow ETH by depositing USDC as collateral:

• The ETH received as a loan is not income: it is debt.
• Interest paid → possibly deductible if ETH is used for investment.
• If the borrowed ETH is sold → transmission of ETH with profit/loss.

If your collateral is liquidated (you do not maintain the ratio):

• Transmission of collateral at the liquidation market price → profit/loss.

Special cases

Compound + DeFi self-liquidating bots

If a bot kills you before you can act:

• Liquidation is also a taxable event: transfer of collateral.

Reuse of cTokens in other protocols (Yearn, etc.)

• If you use cDAI as collateral in another protocol → there is no transmission (the asset remains yours).
• When liquidating that position in the other protocol → cDAI transmission.

Compound tax summary

Updated: April 2026 | Fiscal year: 2025