Compound Lending Platform Clients Accumulate in Ethereum Assets, Over $1B

Compound Lending Platform Clients Accumulate in Ethereum Assets, Over $1B

DeFi’s leading token, Compound (COMP), is currently supplying Ethereum (ETH) assets worth more than $1 billion.

Compound is a blockchain-driven credit pool that allows a lender to offer its cryptocurrencies to other users to mine and make a profit. The lender charges a fee for each transaction.

This type of transaction is comparable to conventional banks’ work. Banks earn capital from deposits, and at interest, they give it to third parties. The bank guarantees the depositor that his money is at all times safe and available, and also generates interest in the savings account. That’s a win-win opportunity for all stakeholders.

The same is true in decentralized finance (DeFi). Compound is a “bank.”
Though Compound is fairly new, the prominence of Compound is rising at a significant rate. Its total assets last week stood at more than $1 billion. This week, it raised a further $30 million.

The three key assets comprise, respectively, Basic Attention Token (BAT), Ethereum ( ETH), and USD Coin (USDC).

June has been an especially exciting month for Compound. COMP was listed on the FTX on 19th and Coinbase followed four days later. Binance followed suit on the 25th for its trading platform, increasing the price by 25 percent. So it also got on the OKEx list on the 29th.
That being said, Vitalik Buterin, co-founder of Ethereum, claims DeFi is being excessively hyped.

DeFi Sector Overly Hyped
Ethereum co-founder, Vitalik Buterin, criticized the fast-growing decentralized finance (DeFi) sector as short-term unrest.

The Russian-Canadian programmer went on Twitter to express his opinion about DeFi in a series of tweets. Referring to the DeFi motto “yield farming”, Buterin expressed his disapproval. He also added in another tweet:

“Many bright things are very interesting, but this is a short time; the reality is that in the long run, DeFi will not have interest rates more than a percentage point higher than the best traditional finances. ”

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