Leading DeFi token, Compound (COMP), is currently supplying over $1 billion in Ethereum (ETH) assets.
Compound is a blockchain-driven lending pool which allows a lender to offer their crypto assets to other users to burrow and make a profit. The lender charges a fee for each transaction.
This kind of transaction is similar to the way traditional banks operate. Banks receive money from deposits and lend it to a third-party at an interest rate. The bank guarantees the depositor that their money is safe and accessible at any time while also receiving interest on the deposit. It’s a win-win for all parties involved.
The same principle applies to decentralized finance (DeFi). Compound is ‘the bank’.
Although it is relatively new, Compound’s popularity is growing at a staggering rate. Last week, its total assets were over $1 billion. This week, it garnered an additional $30 million assets.
Its top three assets include Basic Attention Token (BAT), Ethereum (ETH), and USD Coin (USDC) respectively.
June was a particularly exciting month for Compound. On the 19th COMP got listed on FTX followed by Coinbase four days later. On the 25th major exchange Binance followed suit, surging its price by 25%. And on the 29th, it got listed on OKEx.
However, Ethereum co-founder Vitalik Buterin believes DeFi is over-hyped.
Image Credits: Pixabay
