Ex-Bloomberg journalist Camilla Russo noted on Jun. 19 that the value of tokens locked in DeFi applications has skyrocketed 40% in the past week alone. There is now $1.4 billion worth of digital assets locked in such applications.
But driving this growth wasn’t DeFi’s poster child, MakerDAO, it was Compound.
The king of decentralized finance has been unseated
Driving DeFi’s growth this week was Compound, a decentralized money-market protocol that allows users to borrow and lend their assets.
The protocol didn’t change. What did change, though, was the public introduction of COMP — Compound’s governance token.
Prior to this past week, it was only held by investors and owners in the company that runs the DeFi protocol. But Compound this week made the token public, allowing users of the protocol to earn the altcoin.
And despite it being days from public launch, the Ethereum-based COMP has seen parabolic growth.
The former is now the 22nd largest cryptocurrency, trading more than 20 percent higher in the past 24 hours as the asset prepares to garner a coveted listing on Coinbase.
This win for Compound coincides with the value of cryptocurrency locked in it surpassing that of MakerDAO.
Importantly, COMP’s market is relatively illiquid compared to that of MKR, with a daily volume of $2.1 million compared to MKR’s $7.3 million and a relatively small group of supported exchanges.
It thus could have been manipulated higher by a small group of actors.
The growth isn’t sustainable
COMP’s parabolic growth over the past week has been predicated on expectations that DeFi will continue to see parabolic growth.
Unfortunately, this may not be the case. At least not yet.
The post Why Ethereum’s DeFi poster child MakerDAO was flipped by Compound appeared first on CryptoSlate.
By: Nick Chong
Title: Why Ethereum’s DeFi poster child MakerDAO was flipped by Compound
Sourced From: cryptoslate.com/why-ethereums-defi-poster-child-makerdao-was-flipped-by-compound/
Published Date: Sun, 21 Jun 2020 11:00:26 +0000