Today we take a look at Compound Token and discuss the hype around DeFi tokens. Also, AltCoinTrader is listing Compound Token this week!
Wait, what is DeFi?DeFi or decentralized finance is the crypto industry’s answer to providing financing. By using the Ethereum blockchain, you can build various small financial tools and services in an open financial ecosystem that is both secure and decentralized. Basically, DeFi is a financial system that is independent of central authorities. For instance, you can take out a loan by using your cryptocurrencies as collateral and even lend your cryptocurrencies to someone at a given interest rate.
This is made possible thanks to the blockchain’s ability to verify every transaction that occurs on the blockchain. The saying goes - don’t trust, verify.
What is Compound Token?If you want to earn interest as well as borrow assets against collateral value, you would typically use a DeFi website/platform. One such is Compound.Finance. The website gives you an indication of what coins are available to borrow and at what interest rate you can lend your coins. At the time of writing, one can supply BAT tokens and earn 13.47% interest per annum. On the other hand, you can borrow Ether at 2.03% per annum.
Compound Token (COMP) is the ERC-20 asset that is used by the community to govern the Compound protocol. COMP Tokens give holders the power to propose and vote for specific protocol. It was decided to give power over the platform to the community to ensure good governance and make the platform truly decentralized. Furthermore, if you borrow or lend tokens on the Compound.Finance platform, you will also be a recipient of COMP Tokens. You may use these coins to trade and arbitrage or cast your vote when asked to make important decisions.
Forbes recently published an article titled “How Bitcoin may see an unexpected boost from a DeFi token bubble burst”. The author explains how migrating financial services to a decentralized platform may give Bitcoin a boost and act as an excellent use case for cryptocurrencies like Ethereum.
Compound Token outperforms MakerEven though COMP Tokens have been around for a while, they were only recently released for trading. It was so well received by the market that it overtook Maker in terms of market cap. Compound’s market cap reached a billion dollars making it the new king of DeFi coins. Previously, Maker dominated half the DeFi space.
With Coinbase listing COMP Tokens on 19 June 2020, the price of COMP went from a low of $64.93 to an all-time high of $353.18 within 24 hours. COMP Tokens are the hottest coins right now!
In an effort to make DeFi financing easily available to customers, AltCoinTrader will be listing Compound Token on the exchange this week. Soon you can buy COMP on AltCoinTrader or sell your COMP tokens.
However, users can already deposit their COMP Tokens for trading today. If you would like to learn more about the benefits of DeFi and DeFi tokens, be sure to check out the Rads ACT YouTube page as Richard de Sousa goes into depth on the topic.