Compound (COMP) up by 11% in the Last 7 Days
Compound’s TVL Rises in Tandem With its Price
The cryptocurrency, which also serves as a governance token for the platform, has been in the green for the past seven days despite the overall dip in the market. With more than an 11% price increase in a week, it appears the COMP is enjoying a mini bull run in the largely bearish market.
The Compound protocol is one of the biggest decentralized finance platforms on Ethereum, and it offers borrowing and lending services. Users on Compound can lend or borrow several other digital assets.
For those lending on the platform, there’s the benefit of earning interests for the liquidity they provide, and borrowers also have to provide collateral when they borrow.
As one of the first DeFi platforms, the total value locked in Compound has also grown significantly and is currently over $8 billion.
COMP has a total supply of 10 million tokens and a current circulating supply of 6.3 million. It is an ERC-20 token and was first distributed in June 2020.
The coin is mainly used for protocol governance through discussions, suggestions, proposals, voting, and delegating voting rights to others. This has made it increasingly valuable as the platform itself grows.
What Could be Pushing Compound’s Recent Rise?
While there are no clear signs of what’s responsible for the recent surge in price, recent significant developments on Compound could have been a catalyst for the growth. In December, Coinbase announced offering access to DeFi yields for its users outside of the United States. It was revealed that the yield, in DAI, would be deposited on Compound.
The potential for wider adoption of DeFi this year is also another factor that could be causing the price to increase. Like COMP, the native tokens of other popular DeFi platforms such as Yearn.Finance, Aave, and Uniswap have also seen a significant increase in value in the past seven days.
However, COMP has lost some of its early gains at the time of writing, as it’s currently trading around $233 according to data from CoinMarketCap. Even with the increase, it is still a long way off from its ATH of $911 back in May 2021.