Compound doubled in a week, analysis of three reasons for the rise

Author: how the husband

Source: Odaily Planet Daily

From June 17 to June 30 this year, Compound, the leader of DeFi 1.0, rose from 27 USDT to the highest point of 59.5 USDT. Especially during the six days from June 25th to June 30th, the biggest increase was about 100%. As shown below:

Compound is an algorithm-based mortgage lending protocol that provides users with current floating rate deposits and lending services. As the leading project of DeFi1.0, it is highly sought after by capital and is also a cornerstone of DeFi Lego. Although the fundamentals of Compound are good, it is still worth exploring if it doubles in a week when the overall direction of the market is not clear. We find the following four reasons:

1. On June 17, Compound’s official Medium published the article “The Compound Protocol Belongs to the Community”, which explained: Compound launched an on-chain system to freely distribute COMP tokens to protocol users, realizing community governance. This decentralization of power to the community has greatly promoted Compound users' support for the community, which is also reflected in the secondary market price.

2. According to Lookonchain Twitter, on June 26, a user with the address 0x0D5 deposited 3 million USD to Binance and withdrew 2.26 million COMP tokens within two hours, and suspected institutions entered the market. According to Twitter blogger Ember, on June 29, a user with the same address 0x0D5 raised a total of 170,000 COMP from Binance. Based on the observations of these two on-chain analysis bloggers, it also expresses or hints that institutions are entering the market from a certain angle.

3. On June 29th, Compound founder and CEO-Robert Leshner announced the establishment of a new company, Superstate. The ownership share of the transaction circulation fund on the chain. During the same period, Compound announced the appointment of a new CEO-Jayson Hobby, who worked in well-known companies such as Coinbase and Uber. If it is placed in many other projects, the CEO’s entrepreneurship is considered a negative behavior, but because the former founder’s new venture project has the possibility of synergy with Compound’s business, and the new CEO’s resume is more exciting, it may become an upswing thrust.

4. The first three points are the reasons for the possible rise of Compound’s recent related developments, but the impact of the encryption market environment cannot be ignored. The recent rebound of mainstream currencies such as BTC and ETH will help drive the rise of high-quality blue-chip projects. Needs to be taken into account.

However, the top projects in subdivided fields such as Compound have seen a large increase recently, and users are cautiously chasing higher, DYOR.