Boost In DeFi Lending Pushes COMP’s Price Above $570
The boost in Defi lending pushes COMP’s price above the $570 level thanks to the new entrants in the sector as well as the established traders that are looking to borrow funds which pushed the price of compound to a new high so let’s read more in today’s Altcoin news.
As BTC and other altcoins surge to new highs, new traders are flocking to DeFi lending platforms where they can collateralize their holdings to raise the funds for some new investment which is how the boost in defi came about. Compound is one of the leading Defi platforms and in the past month, the total value locked and governance token price rallied to a new high. Compound ranks third among the DeFi protocols which have about $4.55 billion worth of assets that are locked on the platform and the governance token doubled in value in the past week. Right now, COMP trades for $566 which is a new all-time high after the increase of 325% since the start of the year.
While there are no announcements which catalyzed the rally from COMP as the project integrated with Ledger’s Lend platform that allows wallet users to interact with the platform and to lend out stablecoins. The founder of Compound Robert Leshner discussed the stock buying limitations brokerage companies like Robinhood placed on stocks like GameStop and AMC. According to Leshner, all markets are affected by the long settlement times because on the structure of Depository Trust and Clearing Corporation suggesting that the markets usually run on blockchains as a long-term answer for the current products as he noted:
“Instant settlement would eliminate most of the complexity, cost, and capital requirements which plague T+2 settlement. Robinhood wouldn’t have credit obligations, or the need to turn against their own customers.”
COMP was trading for $241 but it is possible that the extra attention of the GameStop fiasco brought many to the Defi sector and motivated plenty of investors to give Compound and other DEXs platforms a try. COMP also reached the required threshold needed to allow the three-day community voting period that finished a day ago. The proposal passed by a wide margin and will be implemented after two days. Another wave of buying followed this announcement boosted the price 54% higher from the previous $382 in the early hours on February.
The attention from institutional investors is growing and popular names like Mark Cuban and Elon Musk are touting the benefits of decentralized finance with the current TVL being poised to move higher as the token values and protocol engagements are surging to new highs.