The brand new token called Compound COMP has emerged as the largest DeFi token by market capitalization and topped the rankings on its first day of trading. This cryptocurrency is now viral in the world of decentralized finance and as updates from the cryptonews show, it is rising in terms of popularity, too.
COMP overtook MakerDAO and its MKR token by market cap as it rallied by more than 60% in just a few hours. The token has since pulled back around 20% from the local highs over $100. Compound’s market cap of nearly $740 million is now 35% greater than Maker and its $547 million market cap for MKR, according to the market data source DeFiMarketCap.io.
We can also see that Compound COMP is also the 20th ranked crypto asset overall by its market cap, nudging the second largest stablecoin by capitalization – USD Coin (USDC) out of the top 20.
The Compound COMP token started its distribution on Monday. The altcoin news then showed that it launched community governance for the protocol. Now, Compound comprises an algorithmic protocol for decentralized passive interest generation on Ethereum (ETH), and the project’s ERC-20 token affords voting rights to holders and allows them to propose alterations to the protocol’s code.
With the rise of the total value of USD locked in Compound COMP, we can now see that this is the second largest DeFi protocol by assets under management (AUM), increasing by around 48% in a day to reach $176.6 million in locked funds. In other words, this is nearly 17% of the total funds currently allocated to DeFi.
Pushing the combined market cap of DeFi tokens to over $3.2 billion one week after the total capitalization of the sector crossed the $2 billion mark, COMP has definitely done a good thing for DeFi tokens – which now represent more than 1% of the total crypto asset market cap for the first time ever.
One of the most critical things you can do as an investor imo is not succumb to hindsight bias. So to that end, I definitely did not see this COMP launch playing out like this. Not even close. Here’s a few things I got wrong.
— kain.eth (@kaiynne) June 16, 2020
As you can see above, the founder of Synthetix (a platform creating synthetic assets for DeFi) shared his thoughts and offered praise to Compound regarding the successful launch of their token.
“I can see a very strong community emerging around COMP now given the wide range of people earning it […] it’s the new lenders flowing in over the next weeks and months that will really make a difference,” he concluded as he predicted a potential rise to the top position for Compound COMP.
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