{"id":129072,"date":"2020-12-09T00:57:27","date_gmt":"2020-12-08T21:57:27","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/compound-comp-token-outperforms-the-market-as-defi-tvl-rises-to-14-4b\/"},"modified":"2020-12-09T00:57:27","modified_gmt":"2020-12-08T21:57:27","slug":"compound-comp-token-outperforms-the-market-as-defi-tvl-rises-to-14-4b","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/compound-comp-token-outperforms-the-market-as-defi-tvl-rises-to-14-4b\/","title":{"rendered":"# Compound (COMP) token outperforms the market as DeFi TVL rises to $14.4B"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a387485dcbc0\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a387485dcbc0\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/compound-comp-token-outperforms-the-market-as-defi-tvl-rises-to-14-4b\/#Unusually_low_funding_rate_and_spot_market_accumulation\" >Unusually low funding rate and spot market accumulation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/compound-comp-token-outperforms-the-market-as-defi-tvl-rises-to-14-4b\/#So_whats_causing_the_rally\" >So what&#8217;s causing the rally?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Compound (COMP) token outperforms the market as DeFi TVL rises to $14.4B <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>The price of COMP, the governance token of the decentralized finance (DeFi) giant Compound, has been surging while the wider crypto market has entered a correction. Despite the ongoing cryptocurrency market slump, the token has rallied 56% in the past week.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2020-12\/b2245297-2a2b-4644-9359-356b0efb4ed8.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>COMP\/USDT 4-hour chart. Source: TradingView.com<\/em><\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"Unusually_low_funding_rate_and_spot_market_accumulation\"><\/span>Unusually low funding rate and spot market accumulation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There are various potential reasons behind the sudden rally of COMP. Traders have pinpointed the unusual market dynamic on futures exchanges, where the token&#8217;s funding rate remained heavily negative.<\/p>\n<p>The funding rate of an asset in the futures market drops when sellers aggressively short it. But, when the asset\u2019s price increases with a negative funding rate, it opens the door for a short squeeze.<\/p>\n<p>COMP\u2019s recent rally has likely been fueled by a short squeeze across major futures exchanges. This indicates that while the futures market has been betting against the token, traders in the spot market were busy accumulating it.<\/p>\n<p>This trend suggests that some investors might be speculating on a partnership or a major network upgrade in the near term. Otherwise, the futures market heavily shorting COMP while the spot market buys the token would seem unusual.<\/p>\n<p>A pseudonymous trader emphasized that the negative funding rate of COMP caused shorts to pay longs 0.021% of their positions every hour. For context, if a trader had a $100,000 long position on COMP, at that rate, the funding rate would have been $21 per hour. The trader <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/twitter.com\/TraderKoz\/status\/1336332122219454467?s=20\">said<\/a>:<\/p>\n<blockquote><p>\u201cFunding is insanely negative on $COMP. Shorts are paying longs 0.021% every hour. And did I mention $COMP is up double-digit % today while the rest of the market is dumping? Absolutely unreal.\u201d<\/p><\/blockquote>\n<p>So far, Compound has not announced any high-profile partnership but recently Robert Leshner, the founder of the protocol, praised a proposal from a developer named \u201cGauntlet\u201d and described it as a \u201csignificant improvement to Compound.\u201d <\/p>\n<p>The proposal filed by Gauntlet seeks to do three things. First, it removes unused code from the \u201cComptroller,\u201d which is Compound protocol\u2019s risk management layer. It also adds a \u201cGrant\u201d function that allows the Compound governance community to send COMP for grants. The final part of the proposal adds a \u201cContributor\u201d function to allow governance to stream COMP to other addresses.<\/p>\n<p>Referring to the proposal from Gauntlet, Leshner said the proposal is exciting and significant for Compound. He <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/twitter.com\/rleshner\/status\/1336371132287438848\">said<\/a>:<\/p>\n<blockquote><p>\u201cThis proposal is exciting for two reasons; Chart with upwards trend It&#8217;s a significant improvement to Compound Banknote with yen sign The developer ( @gauntletnetwork ) will receive 1000 $COMP (~$170k) for their work on this and upcoming proposals Expanding the protocol is more rewarding than ever\u201d<\/p><\/blockquote>\n<p>However, it would be uncommon for a community proposal to cause a massive price spike within merely days for a major DeFi token.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"So_whats_causing_the_rally\"><\/span>So what&#8217;s causing the rally?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Based on the market trend, a combination of three factors likely led COMP to rally within a short period. <\/p>\n<p>Many traders in the futures market <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>eared to have shorted COMP in the past few days. This catalyzed a short squeeze, and as a result, pushed the price of COMP upwards.<\/p>\n<p>The total value locked in DeFi has also surged to $14 billion, and with Compound being the third-largest DeFi protocol, the overall growth of the space could have benefited COMP.<\/p>\n<p>Traders might also expect an announcement or a network upgrade soon, but there are no signs of one just yet.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener noreferrer\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/compound-comp-token-outperforms-the-market-as-defi-tvl-rises-to-14-4b\" target=\"_blank\" rel=\"noopener noreferrer\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Compound (COMP) token outperforms the market as DeFi TVL rises to $14.4B &#8221; The price of COMP, the governance token of the decentralized finance (DeFi) giant Compound, has been surging while the wider crypto market has entered a correction. Despite the ongoing cryptocurrency market slump, the token has rallied 56% in the past week&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":129073,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2020-12\/8da92b40-f775-4078-9f34-7663a1a44193.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74868,75150,73785],"class_list":["post-129072","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-defi","tag-market-update","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/129072","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=129072"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/129072\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/129073"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=129072"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=129072"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=129072"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}