Last few days in crypto space were ruled by decentralized finance’s lending protocol, Compound’s COMP token. The COMP Token raced to its all time high price of $353 on June 21st and is still in uptrend. The crypto space started off with just one cryptocurrency, Bitcoin. But, with time hundreds of coins have entered the industry. In this article we will walk you though the ifs and buts of this token.
Road To Fame: KO, Compound Dethrones Maker
Compound has been in the DeFi space for quite some time now. It was even touted as the largest lending platform in the DeFi space. However, this platform always stood second as Maker is considered the face of DeFi. The total value locked in Maker is so high that it has dominated the DeFi space for a long time now.
Out with the old and in with the new. Compound has taken the DeFi space by storm. Soon after the release of its governance COMP token, Compound seems to be over the moon as the platform practically dethroned Maker.
Compound has existed in the DeFi space since October 2018. However, the platform hadn’t even come close to locking $200 million. Things transpired so quickly that the platform broke its own records as well as others over the last week. The total value locked in Compound was at a low of $90.403 million on 14 June 2020.
In less than 24-hours, the figures kept increasing and continued in the same direction. At the time of writing the total value locked in Compound was a whopping $559.572 million.
Maker on the other hand has previously locked as much as $764 million. However, at the time of writing the credit platform had a total of $478.825 million locked.
The disparity of the total value locked in the top DeFi platforms was so high that Maker had previously dominated more than half of the entire DeFi space. But, at press time, Compound’s dominance was 37.66 percent.
Additionally, Compound overtook Maker in terms of market cap as well. At the time of writing, Compound’s market cap was $3,620,446,079 whereas Maker’s market cap was only $520,244,537. This huge disparity makes it clear that Compound’s dominance will go on for a while.
What Is Compound [COMP] Token?
Compound is a decentralized finance [DeFi] platform that allows its users to earn interest as well as borrow assets against collateral. The platform’s latest release, the COMP token allows its users to participate in its governance process. Recently, this governance token was released for trading. Below is a screenshot to understand it better.
Here is a video by team at boxmining to understand the token better.
Birth Of The COMP Token
Back in February, Compound announced that the platform is all set to roll out the Compound governance token popularly known as the COMP token. Even though the token was announced a few months ago, the team decided to traverse the administration of the lending platform to the token holders from the team. Earlier this month, the ‘Distribution of COMP to Users’ poll received a 100 percent thumbs up from all the token holders.
Just a week ago, the Compound team revealed that COMP, the governance token of the lending platform was available for its users. Soon after the announcement, the COMP-ETH pair received shelter at the decentralized exchange, Uniswap. On the first day itself, the pair recorded liquidity of more than $2 million. At the time of writing, about 2682 transactions registered and the trading volume stood at $4,527,407.
These numbers further incline towards the fact that the token had a prolific start.
COMP Token Blazed The Trail
The release of the COMP token did turn heads. However, the significant rise in its price is what cut the deal for many. The nascency of the token has resulted in almost zero data regarding its price on the first day. However, as per CoinMarketCap, the token was trading at $82.99 USD on 17 June 2020. After this, the price of the token was seen going uphill with very flimsy bumps.
Furthermore, the token did drop to a low of $64.93 on the third day of its existence. But the low didn’t seem to last long as the COMP token soared to a high of $234.46 on 19 June 2020 which was less than 24-hours. At the time of writing, the token was trading at an all-time high of $353.18 with a 71.64 percent increase in its price over the past 24-hours.
Additionally, the market cap of the token was also seen surging as it is currently at $904,598,784 pushing it to the 19th spot on CoinMarketCap’s top cryptocurrencies list.
What caused this significant upward trajectory, you ask?
Did Coinbase Fuel This COMP Token Price Rally?
San Fransisco based Coinbase was one of the first cryptocurrency exchange to announce its support for the comp token. The exchange released a blog post announcing that the token would be launching on Coinbase Pro from 22 June 2020 and trading activities would commence the next day. The exchange laid out a systematic process of on-boarding the newly released token.
On Monday, June 22, our COMP-USD and COMP-BTC order books will enter transfer-only mode, accepting inbound transfers of COMP in supported regions. Orders cannot be placed or filled. Order books will be in transfer-only mode for a minimum of 12 hours. https://t.co/maPTOLdYiW
— Coinbase Pro (@CoinbasePro) June 18, 2020
Coinbase wasn’t the only exchange that showed interest in this latest governance token. Cryptocurrency exchange FTX, which was released just last year went a step ahead and not only listed COMP but also rolled out futures trading for the token. The average price of trading pairs, COMP/ETH, and COMP/USDT on Poloniex, as well as COMP/USD on FTX US followed by COMP/USD on FTX, will be calculated as COMP’s index price on the exchange.
After FTX as well as Coinbase’s announcement, the price of the token increased by almost 80 percent.
Do you think Compound’s COMP token is here to stay or just a nine days’ wonder?
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.