- The COMP token hit $372 over the weekend just a week after initial distribution
- The governance coin will be listed on Coinbase today
- CMP’s performance shows that DeFi will likely drive the alt space in 2020 and beyond
Compound (COMP), the governance token allied to the Compound DeFi project, has enjoyed an extraordinary launch that has seen it rocket up to $372 per token, while the volume of ETH held within the project has grown by five times in just a week. The instant success of the COMP token and the sudden growth of the platform after two years of relative obscurity shows that DeFi is likely going to be to 2020 what ICOs were to 2017.
It’s funny how you can actually make more money by trading DeFi than actually using DeFi.
The very definition of a bubble, I love it!
Pump it Peter! 🤯
— Mr. Backwards ® (@Coin_Shark) June 21, 2020
COMP Token Goes From Zero to Hero
Compound is a smart contract-based lending protocol which allows users to deposit their ETH as collateral and receive interest or take out loans based on what they have locked away. It launched way back in May 2018 when DeFi was just a twinkle in the eye of developers, but the huge potential of smart contract-powered financial systems has been shown in their rapid rise in 2020, with the performance of the COMP token exemplifying that.
Compound has hardly made headlines since it first started accepting deposits two years ago, but it has steadily been gaining traction as the DeFi space has grown. No one could have predicted just what would happen to the token on its launch however (it is a non-sexy governance token after all), which has been helped by a number of factors.
Firstly, the DeFi craze seems to be the crypto craze of 2020. Everyone is talking about it, DeFi apps are being developed left right and center, and it is emerging right at the start of a new market cycle. Secondly the supply started out very small (the COMP token is given to users), combining high demand with low supply. And thirdly, Coinbase announced that it would be listing the token at 9am PT today. This sent an already hugely well performing token into the stratosphere, defying all predictions and leaving holders with a dilemma of whether to hold or sell.
DeFi the Protocol to Watch in 2020
The COMP token buzz will soon fizzle out and the price will settle down to a fair market value, but its incredible performance proves three things – we are definitely in an alt season, the Coinbase pump is still in effect, and DeFi tokens are going to be HUGE in 2020/21.