> For the complete documentation index, see [llms.txt](https://ret2basic.gitbook.io/ctfnote/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ret2basic.gitbook.io/ctfnote/web3-security-research/defi/compound-v3.md).

# Compound V3

{% embed url="<https://www.rareskills.io/compound-v3-book>" %}

**Notes on economic model:**

Compound is oftentimes used for <mark style="color:red;">**leverage**</mark>. For example, if I strongly believe ETH price is going up, I want to long ETH with some leverage. I can go to Compound, deposit ETH as collateral and borrow USDC for example. After that I can buy ETH with borrowed USDC, so when ETH price does go up I can withdraw my collteral and sell all the ETH I hold. Even crazier, I can deposit that ETH we just bought as collteral again, and borrow USDC one more time. The leverage is getting larger and larger by doing so.