Compound (COMP) is a competitor of the Maker (MKR) is the crypto market is currently a little crazy. Not only the Listing of the Tokens came blow to blow all the well-known stock exchanges, but also the course has a veritable roller-coaster ride and is still trading very high. Let’s look briefly at what is Compound (COMP) is and why it is such a Hype has been triggered.
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Compound to compete against Maker
On Monday, Compound (COMP) was released to the users of the decentralized credit platform. The tokens are used to decide on the Governance. After the release of the DeFi Pulse platform has been a huge increase in the ETH Compound found. In total, the capital tied up could exceed the first $ 300 million and still has just under 200 million and it’s going to go to the Maker. Here, the question is what has led to this incredible Run of course.
Without question, it was a wild week for Compound (COMP). The rate increased in only one day about 100%. The Hype COMP is not dismissed out of Hand. Many of the Ethereum investors have deposited their ETH as a security to collect the currently still very limited COMP. Overall, only 0.2% of the maximum total amount of COMP are currently in circulation. Compound pay day borrower and lender in the COMP. This is currently the only way to earn COMP.
In addition, USDC, USDT, and additional tokens can be deposited. In addition, the Community can decide with your COMP if and what type of Token is next, as a security can be stored.
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Coinbase Per Listing in their own interest
The result is that many borrowers have used their loans to make the money to provide the other for a loan and to tear, in this time, other COMP under the nail. As a result, the deposited capital, according to the Compound that is currently at about 439 million USD. A total of 9 different Assets were used.
The Coinbase Pro Listing has led to a further Hype. Coinbase has decided actually to list a new product on the page. Normally, the stock market waits until a certain amount of liquidity and trading volume around the Token/Coin formed.
This approach should, however, not a Surprise, considering that Coinbase has invested 8.2 million USD in a first round of Compound. Accordingly, a high level of interest there is here, of course, to push the private Investment. In addition, a total of 10% of the USDC, the Stablecoin of Circle and Coinbase are currently bound in the Compound. Also, the increased deposited Tether (USDT) since the 11 of June, by 8,000%.
The limited quantity in Circulation carries risks
In summary, we can say that from day to day 2.880 COMP to borrower and lender will be issued on the Compound. According to the Compound site have been released only 9.231 of the 4.2 million provided for the Community.
Haseeb Qureshi, managing Director of Dragonfly Capital, noted in an E-Mail to CoinDesk, on Thursday, the long-term prospects of the Compound and the short-term reality of his Governance-Token in the context:
“In view of the fact that COMP is a potential claim on future interest payments, as more securities are on Board from the Compound, should make this COMP more valuable, because more and more credit show up donors/borrowers. (In the short term, most of the price fluctuations of COMP are, however, a function of the tiny quantity in circulation. Remember the early days of Zcash. I would not interpret too much in the current course into it)“.
For more information on Compound (COMP) can be found here.
Therefore, be advised at this point to caution. Especially, because the Compound concept has not been tested extensively, and it can come to problems and errors. We will keep you up to date.
What do you think of Compound (COMP)?
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