Tether’s volume on decentralized lender platform Compound has soared as traders try to maximize the amount of COMP they receive.
Data from Compound shows the supply of the USD-backed stablecoin has quadrupled from roughly $43.7 million at the start of the week, to over $224 million on Friday. This time last week, USDT supply had just about crossed the million-dollar mark.
With 2,000 suppliers (lenders) and just over 400 borrowers, USDT one of the largest and most active lending markets on the Compound protocol. For comparison, the supply for USDC, another stablecoin, is currently just under the $170 million mark – although the number of lenders is far higher at over 5,500.
“USDt’s growth on Compound has been faster than the growth of any other asset in the protocol, by multiples,” said Calvin Liu, Compound’s strategy lead, in a statement.
This bookends a rather manic week for Compound. Total value locked (TVL) has been on a near-vertical trajectory since the release of its new governance token, COMP, on Monday – it broke past the $100 million boundary on the same day, for the first time.
At the time of writing, TVL stood at just under $400 million, according to data site DeFi pulse.
One of the reasons for Compound’s soaring popularity this week might be that users are trying to receive as much COMP tokens as they can. The platform rewards all activity with COMP, so both lenders and borrowers are directly incentivized to use the platform as much as possible.
This incentive has created a feeding frenzy as COMP soars in price. The token price has more than doubled in the past 24 hours to $200. The rise has been so rapid that aggregation sites are flashing different numbers for market value. At press time, DeFi Market Cap gave Compound a market cap of $1.9 billion, whereas CoinGecko had gone for a more conservative $500 million.
Automated market maker Curv told CoinDesk earlier this week that it was seeing users depositing USDC as collateral…