There are multiple ways of making money in the crypto market just as is the case with the traditional finance market. Those who have a higher appetite for risk can pursue crypto trading but there are also low-risk options such as yield farming which is ideal for the risk-averse.
Yield farming allows anyone to make money by putting their money into a liquidity fund from which borrowers can take out crypto loans. Compound (COMP) is one of the best DeFi protocols currently available in the market and also one of the most popular ones. Its popularity is not a fluke but rather the fact that it is one of the pioneers in DeFi lending, and it provides users with annual returns as high as 8%. This puts it in the upper echelon of the most profitable yield farming platforms.
Compound leverages the power of decentralized finance to give people financial freedom and financial responsibility. There is little incentive to save money in the bank these days because of the low interest rates earned. Yield farming platforms such as Compound provide an alternative through which users can earn higher annual interests as high as 8% by simply putting their funds in a DeFi lending pool.
Compound allows users to use multiple Ethereum-based crypto assets in the lending pool which function as redemption tokens. Some of them include DAI, Wrapped BTC, Ether, Tether, and USDC among others. However, they are converted into C-tokens on the Compound platform. C-tokens are inflationary and increase every time an Ethereum block is generated.
Despite support for multiple digital assets, it also features COMP, the native cryptocurrency on the Compound platform. It provides utility as the governance token on the protocol and is also used to pay out rewards to platform users and investors.
COMP is currently ranked 42nd on CoinMarketCap thanks to its $1.96 billion market cap. It is currently priced at $377 and has a circulating supply of 5.36 million coins and a maximum supply of 10 million coins.
Source: Binance
COMP’s price has surged by 17.75% in the last 24 hours at the time of this press, making it one of the coins that have recovered the most after the recent market-wide price slide.
If you are considering COMP as a potential investment, it is always a good idea to conduct market analysis before making a decision. So far we have established that it is more scarce than Bitcoin considering its low circulating supply, so it is already off to a good start. COMP has been around since 2017 and has so far enjoyed tremendous growth thanks to the rapid popularity of DeFi. COMP happens to be a good yardstick to measure just how much it has grown so far.
COMP traded as low as $134 at the start of 2021 and its price soared to an all-time high of $911 at the height of the crypto bull market in May. The recent price movements are a good show of this cryptocurrency’s potential. However, you should also consider other important metrics. For example, the Compound DeFi platform is ranked 3rd best DeFi lending platform according to DeFi Pulse, which means it is one of the leading players in its respective field.
Top DeFi lending platforms are poised to leverage strong growth in the next few years as more people venture into this space. The higher interest rate provided by Compound and other similar DeFi lending platforms is a huge incentive for onboarding more users in the future.
Sydney has 20+ years commercial experience and has spent the last 10 years working in the online marketing arena and was the CMO for a large FX brokerage.
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