Despite the ongoing slump in the cryptocurrency market, the Compound (COMP) coin has sustained its upward rally gaining nearly 6.5% in seven days to trade at the $55 level. The Compound is a blockchain that supports the borrowing and lending of digital assets. It enables users to lend and borrow crypto resources from the network.
The native coin of this blockchain system is called COMP, which plays a significant role in introducing new policy revisions and regulatory actions. It should also be noted that the Compound will provide stablecoin loans to institutions, accepting as collateral Bitcoin, Ethereum, and several other ERC-20 assets.
The platform claimed in a Medium post today that the latest initiative comes as there is increasing demand for cryptocurrency loans. It also said that institutions can now borrow through Compound Treasury, the only decentralized enterprise to have acquired a credit rating from S&P Global Ratings. Thus, the Compound network’s innovations typically have a beneficial impact on its prices. On the other hand, the dramatic decrease in the value of cryptocurrencies was one of the key factors that kept the lid on any additional gains in the Compound coin.
Compound Price & Tokenomics
The current Compound price is $54.11, and the 24-hour trading volume is $81 million. In the last 24 hours, the compound has dropped 3.31%; however, it has gained over 6.5% in the last seven days. With a live market cap of $393 million, CoinMarketCap currently ranks #88. There are 7,267,152 COMP coins in circulation, with a maximum supply of 10,000,000.
COMP Price Chart – Source: Tradingview
Compound to Offer Stablecoin Crypto Loans
The Compound is about to provide stablecoin loans to institutions, accepting as collateral Bitcoin, Ethereum, and several other ERC-20 assets. The platform claimed in a Medium post today that the step is about to come in the wake of a rise in interest in cryptocurrencies loans. It also added that institutions can now borrow through Compound Treasury, the only decentralized business to have acquired a credit rating from S&P Global Ratings.
According to Reid Cuming, vice president of Compound Treasury, the company can now meet the demand for liquidity with a straightforward, dependable borrowing solution and continue to offer the same reliable service it has been giving clients who have been receiving interest for the previous year.
According to the protocol, “authorized” institutions may obtain stablecoin loans with fixed rates beginning at 6% APR in USD Coin (USDC) or US dollars. Institutions can “draw liquidity and repay amounts as they see fit for as long as they remain overcollateralized” because the loans will not have a set maximum or minimum amount.
Compound ranks seventh among DeFi protocols regarding total value locked (TVL). Since its debut in September 2018, the protocol has amassed over $2 billion in assets and a volume of transactions exceeding $285 billion.
Risk-Off Sentiment in the Crypto Marke
The global cryptocurrency market cap fell below $1 trillion in the last 24 hours, which has caused the cryptocurrency market to lose momentum since the start of the new week. The world’s oldest and most valuable cryptocurrency, Bitcoin (BTC), saw no improvements and was hovering around the $20,000 mark early Thursday.
Leading cryptocurrency coin prices seem to be heavily influenced by the effects of US inflation data. The gains for Ethereum (ETH), whose Merge happened on September 15, were also underwhelming. Dogecoin (DOGE), Solana (SOL), and Litecoin (LTC), among other well-known cryptocurrencies, were among those to go into the negative territory. The declines in the cryptocurrency market were therefore seen as one of the key factors limiting further gains in the compound coin.
Upswings in the US Dollar
Another key element that was thought to have limited the gains in compound coins was the stronger US dollar. The greenback maintained its upward streak and closed to recent highs in anticipation that the US Federal Reserve will keep its aggressive tightening of monetary policy to reduce inflation. As a result, the dollar index held steady at 109.84, maintaining its 1.5% gain from Tuesday when US inflation data surprised observers by coming in higher than expected.
Markets then positioned themselves for the Fed, which now seemed to have no choice but to proceed with another sizable raise at its rate-setting meeting the following week. The US dollar also benefited from the risk-off market sentiment because it tends to increase demand for safe-haven assets like the US currency.
Related
Tamadoge – Play to Earn Meme Coin
- Earn TAMA in Battles With Doge Pets
- Capped Supply of 2 Bn, Token Burn
- NFT-Based Metaverse Game
- Presale Live Now – tamadoge.io
