Compound, a decentralized finance (DeFi) lending platform, reaches $1 billion in total loans disbursed since launch to over 4500 borrowers.
According to Compound’s official site, the platform has already disbursed over $1 billion in crypto-denominated loans as the rush of yield farming gets stronger by the day. Compound currently leads the yield farming craze, whereby depositors and borrowers place their digital assets in different DeFi platforms to earn the most significant interest.
On Sunday evening, the total borrowed amount stood at $985 million before ‘yield sharks’ borrowed another $16 million on Monday to surpass the $1 billion mark barrier. While the borrowing and lending of crypto assets have been going on for a while – Maker (MKR) is leading the charge for the better part of years. Compound’s launch of the COMP token rewards tilted the favor to its side, allowing users to earn more yield from lending operations.
The Total Locked Value?
One of the most popular oracles to check the progress of DeFi products such as Compound is DeFi Pulse. The platform, however, focused on the total value locked (TVL), which is calculated as the total amount deposited minus the entire borrowed amount. Currently, at $695 million in TVL, Compound is the most extensive DeFi product, holding 30.41% of the total market value.
Maker comes a close second with a total of $631 million locked, while ‘yield craze platforms’ such as Synthetix, Aave, and Balancer a distant third, fourth, and sixth on the log.
DAI Leading the Markets
According to stats provided on the Compound website, DAI stablecoin leads in the amount borrowed by investors on the platform. The stablecoin dominates with nearly 80% of the total amount borrowed with USDC, ETH, and 0x taking up 14%, 2%, and 1% of the borrowed amount, respectively.
However, some numbers seem not to be adding up – especially on DAI. According to Coingecko, the total market capitalization of DAI is $193 million, but the entire supply on Compound reads over $850 million. This is majorly due to the leveraging of tokens to create strategies to increase DAI interest rate payments and earning COMP tokens.
Since the launch of its governance token, COMP, on Jun 15, the platform witnessed a spike in the value locked as investors try to get their hands on COMP rewards. The TVL on Jun 15 stood at $97 million and immediately started bursting through barriers reaching $608 million just a week later as the crypto world took note of the ‘yield farming’ opportunities.
COMP token is currently trading at $173, registering a slight 2 percent drop in the last 24 hours, registering a total market capitalization of $443 million.