The COMP governance token is seeing massive gains (increasing more than 270% day over day, according to CoinDesk’s First Mover team), as well as potential listings on Coinbase Pro and CoinFlip, a crypto ATM network.
This wild, retail-driven speculation is also driving value into Compound’s smart contract. With $395 million locked up, Compound is gunning for the position of DeFi king, long occupied by the MakerDAO protocol. By another metric, COMP has already surpassed MKR in fully-diluted value, according to DeFi Marketcap.
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What this points to is a possible sea change in the DeFi lending standard. Compound is a lending protocol that allows users to leverage deposits and algorithmically sets interest rates based on demand. COMP, the protocol’s governance token, will let holders vote on development decisions, including which types of collateral to accept.
Only launched Monday, with about 10,000 of the 4.2 million tokens set aside for community members in circulation, it’s impossible to gauge what comes next. To put it in Mythos Capital Founder Ryan Sean Adams’ words, “Stocks drunk. DeFi sober. I wrote that Monday. I jinxed us. Cause DeFi’s drunk now too.”
DeFi has been completely overtaken by Compound this week. As long as the token’s price remains above $100, the effective market cap of COMP, the new governance token, is more than $1 billion, though many of the tokens are illiquid. It’s hard to predict what will happen – as only approximately 10,000 of the 4.2 million tokens set aside for community members have been released, though here are a few staggering data points:
- Coinbase Pro announced Thursday it will list COMP next week, after investing in Compound’s $8.2 million seed round in…