MEXCDeFi Based Cryptocurrency, COMP, Jumps 100%. Organic Rise or Coinbase Effect?
COMPOUND governance token [COMP] is the DeFi token backing the Compound borrowing and lending market, like MakerDAO. Compound’s token, COMP, began being distributed to the community with governance protocols on Monday; since then, the token has seen a massive jump in the price.
The total value locked in Ethereum and DAI in the DeFi has jumped by 81% ($57.3 million) and 200% (total $11.6 million).
The release of the COMP token essentially implements decentralized governance based on incentives, taking control from the company to the public. During the initial period, some COMP was distributed among the company’s stakeholders, which includes Coinbase.
The public distribution began on 15th June when the price of the token was around $60. The price of COMP at 14: 33 hours on 18th June 2020 is $124.
Coinbase Effect
Today Coinbase Pro announced the listing of the token on its Coinbase Pro platform. The listing has come has a pleasant surprise for COMP token holders.
On Monday, June 22, our COMP-USD and COMP-BTC order books will enter transfer-only mode, accepting inbound transfers of COMP in supported regions. Orders cannot be placed or filled. Order books will be in transfer-only mode for a minimum of 12 hours. https://t.co/maPTOLdYiW
— Coinbase Pro (@CoinbasePro) June 18, 2020
The euphoria in the prise post the Coinbase listing announcement has been tremendous. The price surged over to a peak rise of 136% in the hour following the announcement.
Organic Growth or Euphoria?
With the increase in the value locked in the DeFi, the growth seems organic at the moment. Nevertheless, the surge has now doubled the market capitalization of Compound vs. DeFi.
The total value locked in Maker’s DeFi ecosystem is $492 million, while that on Compound after the 200% surge is $281 million. Hence, the total market capitalization of compound seems exaggerated at the moment.
Moreover, due to the recent launch, currently, a market for shorting the coin has not been introduced. This leaves little room for bulls to act on the short side liquidity pushing prices higher. Hence, when the buying reaches of COMP reaches exhaustion, the big hands are expected to dump on the markets. Nonetheless, new adoptions and a further increase in locked value can continue to bullish run.
Do you think there is more upside to COMP token? Please share your views with us.
- Solana, Litecoin, HBAR ETFs by Bitwise, Canary, and Grayscale to Start Trading This Week
- Analyst Slams S&P’s ‘B-’ Rating for Strategy Inc, Says Bitcoin Treasury Model Is “Misunderstood”
- Metamask Airdrop Countdown Begins as Wallet Team Registers Token Claim Domain
- $2.5T Citigroup Partners With Coinbase to Enable Stablecoin Payments
- Who Will Be the Next Fed Chair? Scott Bessent Confirms Final Five Candidates
- Polymarket Traders Bet Ethereum Price to Hit $5,000 as Bullish Pattern Forms
- Dogecoin Price Prediction As Whales Scoop Over $300 Million- Is A Bull Run Ahead?
- Pi Coin Price Jumps 24% as 10M Tokens Exit Exchanges – Can Bulls Sustain the Momentum?
- Bitcoin Price Prediction If President Trump Announces Deal with China on October 30th- Can BTC Break $125k?
- Analyst Eyes Key Support Retest Before a Rebound for Ethereum Price Amid $93M ETF Outflows and BlackRock Dump
- Bitcoin Price Eyes $120K Ahead of FED’s 98.3% Likelihood to Cut Rates
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
