The Ethereum -based cryptocurrency loan system , Compound (COMP), is about to hit the billion dollar mark on cryptocurrency loans. This comes in the middle of the total USD funds frozen in Defi exceeding $ 2 billion.
DeFi's most popular loan token reaches $ 1 billion
According to the official Compound website, the total valuation of the crypto assets borrowed under the Ethereum- based loan protocol has just reached the billion dollar mark.
The most popular loan and borrowing token in the compound is DAI . About 80% of users have borrowed DAI , followed by USDC and ETH 14.4% and 2.4%.
The total number of borrowers is 4,579. With 31,632 suppliers, these three assets are also the most widely supplied cryptographic tokens.
Interestingly, the USD amounts of DAI token loans provided and borrowed are around $ 800 million, with a tight divergence of around 10%. This contrasts sharply with other assets, as they have considerable differences in the number of supply and borrowing. You might also like:
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Another point to mention is the disparity compared to the figures indicated on DeFi Pulse. According to the DeFi activity tracking website, Compound has about $ 700 million in total locked value. This is actually the amount deposited by the loan providers. After adding the borrowing figures, the total supply of the compound market is approximately $ 1.7 billion.
What is the compound and what makes it so special?
Simply put, Compound is an open source financial system based on Ethereum . Participants in this system can borrow and lend funds by locking up their spare crypto assets. The design of the protocol allows a decentralized determination of interest rates, depending on the demand and the supply of available cryptographic assets.
This is a radical change from the usual banking system that unanimously determines interest rates on savings bank accounts.
In February of this year, Compound founder and CEO Robert Leshner announced a community governance system for the protocol. According to him, this will prevent the central team from participating in the decision-making process.
You can participate in the community by having the COMP token.
What is fueling this massive growth?
As reported by CryptoPotato last month, Compound's appreciation in locked total value (TVL) is fueled by growing interest in "liquid extraction".
Borrowers and lenders have provided cash to the protocol in large numbers in exchange for COMP tokens, in the hopes of reaping benefits from future token price increases.
Interest in investing in the compound also increased as Binance rolled out 50X leverage trading and OKEx added support for COMP spot trading.
CR companies did not stay either. Andreessen Horowitz and Polychain Capital have invested $ 79 million and $ 75 million respectively in Compound. Among others, Paradigm invested $ 26 million and Dragonfly Capital invested $ 7.3 million.
