Last week a relatively unknown cryptocurrency surprised many by breaking the ranks of the top 20 cryptocurrencies. This newcomer, called Compound has been gaining ground for a while, but last week its market cap got registered by CoinMarketCap.
The cryptocurrency started off in the top 50, but when Coinbase announced it would list the cryptocurrency, momentum was in favour of Compound, and it started to take off. Coinbase Ventures, the investment division of Coinbase is also one of the early investors of the project, together with some other major venture capitalists.
So what is Compound (COMP) exactly? It is a DeFi
project which initially was built to become a marketplace for placing collateral and borrowing money. The idea is to allow other companies to develop such solutions on top of the Compound platform; several companies have done so.
On June 15, $100 million was locked in the Compound platform, at the moment of writing, this has grown to $600 million. As a result, Compound has now overtaken MakerDAO
(MAKER) as the protocol with the most locked-in value. The total USD value locked in Decentralized Finance protocols is now almost $1.5 billion, up from $1 billion only a week ago. Another interesting metric is that 3 million ETH or 2,7% of all Ether in circulation is locked in DeFi.
The sudden rise of Compound and corresponding growth of the DeFi value as a whole indicates a growing interest and possible hype around the value proposition that DeFi provides. Expectations are that this will continue to grow for the foreseeable future.