Compound — a new bubble or an indication of strength?

image: USD total value locked in DeFi (courtesy of DeFi Pulse)

Reasons for the increased demand

  • community interest — Compound’s reward scheme lets users earn extra COMP for any borrowing and lending activities in the protocol. This is similar to a cashback system, in which users get paid when they borrow or lend. When users vote for Compound community proposals, it serves as an incentive for them to “farm” or earn COMP by borrowing or lending assets in Compound so that they can be more active in its governance process.
  • higher than average yields — Compound users’ lending and borrowing activities are also encouraged by relatively high yields offered when compared to some of the supported assets in the protocol. The annual percentage yield is currently standing at 14%. Each money market on Compound adopts a floating interest rate the value of which fluctuates based on the market supply and demand of the underlying asset. The interest rate of the asset, in short, rises when the asset is scarce and highly sought by traders
  • multiple exchange listings — on June 23, Coinbase Pro became the first major exchange to support the listing of COMP, later followed by OKEx and Binance.
(source: Twitter)

Are we looking at a bubble?

(source: Twitter)

DeFi: is it sustainable?

(source: Twitter)




Cryptocurrency market data overview and research platform.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium


Cryptocurrencies Will Not Necessarily Fare well in an Inflationary Environment

Maximize your hodl with Binance Earn — Flexible Savings

How does 420 DAO protect its members?

Looking to gamify and monetize your experience as a social media user or media content creator?

Is it worth it to learn Solidity in 2022?

Want to support Ukrainians? Give them a job!

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store


Cryptocurrency market data overview and research platform.

More from Medium

Serenity Capital Making Investing Like a Day at the Beach

Berry Data and Tari World Reached Have Became Business Partners

Alpha Impact June Recap — FTX.US Support, Polygon Integration & Signals Monetization