COMP token market cap increased by more than 60% in just a few hours.
Compound first unveiled the governance token in February 2020, kicking off its plan to transition control of the protocol from the company to token holders. During the initial period, some COMP was distributed among the company’s stakeholders with the token going live in mid-April.
A vote on a proposal to distribute COMP to users was recently passed on the 15th June 2020 with an overwhelming majority vote by the initial token holders.
In response to the addition of the native token and distribution this week COMP overtook MakerDAO’s MKR token by market cap as it increased by more than 60% in just a few hours.
Compound was initially launched in September 2018 and upgraded to version 2 in May 2019 and currently supports ETH, DAI, SAI, BAT, REP, USDC, WBTC, and ZRX.
It is an autonomous interest rate DeFi protocol built for developers to unlock open a wide variety of complimentary financial applications. Furthermore, the Ethereum-based platform lets users earn automatically-adjusted interest or borrow assets against crypto collateral.
According to DeFiPulse, Compound is now the second-largest DeFi protocol having increased locked funds by 48% in a day to 176M USD.
At the time of writing this accounts for 17% of the total value locked in the DeFi ecosystem with MakerDAO currently holding the lions share of 488.9M USD in locked funds or 46.6% of all funds invested into DeFi.
The meteoric rise of DeFi
As reported in our monthly DEX overview, DEX trading peaked over $2B for the first time in May 2020. Now just a few weeks later that figure has almost doubled to $3.2B.
Decentralized finance is quickly gaining momentum and taking the market share of its centralized counterparts as for the first time DeFi tokens now represent more than 1% of the total crypto asset market cap.
It will be very interesting to see whether a continued flow of new lenders will show up over the coming months as that will really have a significant impact on Compounds position in the market and value.
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