New Compound token tops DeFi rankings on first day
After just one day of trading, the Compound COMP token has become the largest decentralized finance (DeFi) token by market capitalization.
COMP surpassed MakerDAO’s MKR token by market capitalization, as it recovered by more than 60% in a few hours, the token price has since fallen to about 20% of its local highs of more than $100. Compound’s market capitalization is approximately $740 million, 35% larger than Maker’s at $547.1 million, according to market data aggregator DeFiMarketCap.io.
COMP is currently the 20th overall cryptoactive by market cap, pushing the second largest stablecoin by USD Coin (USDC) outside the top 20.
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COMP Protocol and Governance
The Compound token began distribution Monday, launching the community’s government for the protocol.
Compound comprises an algorithmic protocol for the decentralized generation of passive interests in Immediate Edge, with the project’s ERC-20 token granting voting rights to holders, allowing them to propose modifications to the protocol code.
COMP protocol governance
According to DeFiPulse , Compound is now the second largest DeFi protocol by assets under management, increasing by 48% in one day to $176.6 million in blocked funds, or nearly 17% of total funds currently allocated to DeFi. MakerDAO has $488.9 million in blocked funds, or the equivalent of 46.6% of all funds invested in DeFi.
COMP’s trading has driven the combined token market capitalization of DeFi to more than $3.2 billion, just one week after the sector’s capitalization exceeded $2 billion for the first time. DeFi tokens now represent, for the first time, more than 1% of the total crypto market.
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The Founder of Synthetix underestimated COMP
Kain Warick, the founder of Synthetix, a platform that creates synthetic assets for DeFi and the third protocol in DeFiPulse, praised Compound for the successful launch of its token, saying he had underestimated the impact that the launch of COMP would have:
“I didn’t see how you could build a strong community without a token to boot, but even then you needed something to capture the value, a governance was not enough,” Warwick tweeted.
“I can see a very strong community emerging around the COMP now given the wide range of people who earn it The new lenders coming in over the next few weeks and months will be the ones who really make a difference,” he added, predicting that COMP could soon lead DeFi’s ranking by assets under management.