A report by Flipside Crypto states that investors are liquidating their holdings in Compound (COMP) as soon as the opportunity arises; with quotes on the major exchanges acting as a catalyst.
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The cause of it all
The report states that as soon as COMP started trading on major exchanges such as Binance (BNB) or Coinbase, significant flows of investors were observed towards these exchanges. In addition, there was allegedly a greater transfer from ‚the Compound team to DeFi. This is related to the unannounced inclusion of COMP in Uniswap“.
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When trading on Coinbase took place on June 23, it caused „a large drop in price, probably driven by the liquidation of this investor.
Most Compound users are speculators
The report concludes that the vast majority of Compound users are speculators who are neither borrowing nor lending, stating: „Compound users hold 23.8K of the active supply, while wallets that are not using the protocol hold the enormous amount of 680.4K“.
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However, Compound has experienced rapid growth in the last couple of months. It surpassed Maker (MKR) in Ether’s (ETH) total blocked value (TVL) according to a recent ConsenSys report on DeFi:
„On June 21, for the first time, Compound’s TVL beat Maker’s. At the end of the quarter, $392 million was blocked at Maker and $570 million at Compound.
We approached Compound Finance CEO Robert Leshner to ask his opinion, but he said, „I’m not going to go and argue about false information, that gives credibility to bad reports and smears. However, after his article is published, I will point out how flawed it is“.