Would you like to learn how the crypto asset prices work? Are you into De-Fi? Then, keep reading! In this article, you will get to learn more about the Defi protocols and how Defi protocols work. Also, we will look deeper into the topic by checking out the COMP protocol, making the COMP price prediction, and much more. Sounds good so far? Then, get ready.
Compound Historical Price Analysis
The distribution of COMP started on June 15, 2020, when the token was given to users that use the Compound Finance protocol.
Right after the start of distribution, a Uniswap pool was created so COMP tokens can be traded on one of the most popular decentralized exchanges. Then, the COMP token price was seeded at $16.
According to coingecko, the initial COMP token price was about $71,35. The all-time low was reached about 8 months ago, on June 18, 2020, when the closing price was as low as just $61.25. Several days ago, on February 8, 2021, the all-time high of $549.88 per token was reached.
Current Price, Market Cap, & Supply Details
At the moment of writing, the COMP price is $481 with a trading volume of $590,577,923.28. The token is currently ranked 35th in the list of cryptocurrencies with the highest capitalization, having the market dominance at about 0.15%. The market capitalization is growing and already reached the level of $2,231,911,721.34. The circulating supply of Compound is 4,607,174 COMP tokens, and the maximum supply is 10,000,000 COMP tokens. COMP ROI is 376.4%, which looks impressive, doesn't it?
What is the ROI, and why is it important? The ROI (Return on investment) ratio measures the amount of return on investment, taking into consideration the investment’s cost. The ROI is calculated as follows:
Compound (COMP) Future Price Forecast Predictions
Why make COMP price predictions? Let me tell you why the price predictions are made, in general. First of all, they are really helpful when it comes to understanding the value of an asset. Even though the prices on cryptocurrencies are quite volatile, they do show if the asset is popular or not. One more important thing is that knowing the price that the coin or token might have in the future is crucial to build your trading strategy and/or make some adjustments to it.
Nevertheless, you should always bear in mind that these kinds of predictions or forecasts do not guarantee 100% accuracy. These are mostly made in order to help you and not as the trading advice.
Short Term Forecast
Long Term Forecast
*This price prediction is based on the data collected from various sources meant strictly for educational purposes only and shot not be taken as investment advice. Users should do their own research before investing.
COMP Price Prediction 2021
According to the forecast and technical analysis, the price of 1 Compound token (COMP) would probably reach around $850,86 by the end of 2021, showing a growth of 78,5%
COMP Price Prediction 2022
In 2022 the price of COMP token is quite likely to achieve the level of $982,19, which is 106,06% more than the current asset price.
COMP Price Prediction 2025
In 4 years from now, the COMP token price would potentially be around $1503,21 and will also show quite a noticeable growth of 215,36%.
Best Place to Buy COMP
Best Wallets to Hold COMP
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Is COMP a Good Investment?
Taking into consideration all the information above, the COMP token itself could be considered a good investment with the current ROI rate of 376.4%. However, it is always better to get a fuller picture and stay up-to-date with all the crypto market news, news about Defi, and information about the technical updates in the protocol. This way, you will be able to see clearer and make your own COMP price prediction. Also, the Compound protocol itself is worth looking at because it gives you the opportunity to earn passive income, which can be great for the ones afraid of risky investments.
How to Buy COMP?
Thanks to the big popularity of the COMP token, there are plenty of places where you can buy the token. One of the easiest ways to do that is to use an exchange. There are both custodial and non-custodial exchanges for the ones concerned about the security of their funds. You could use some major exchanges like Binance, OKEx, Bitfinex, Kraken, and others. There is a little guide by Kraken that will help you buy some COMP tokens. An easy and convenient way to see all the exchanges supporting COMP is going to coingecko.
More Information About COMP
What is COMP?
It will probably be a good idea to tell you more about the Defi protocols and then go to the Compound.
Defi stands for decentralized finance, and it is a financial system consisting of financial services that use smart contracts. They were created to let users manage their holdings like a bank but in a decentralized manner, without third parties. The Defi services can already be thought of as a good alternative to banks because they eliminate the need for intermediaries and let users interact with each other via a peer-to-peer system. Apart from giving anyone an opportunity to borrow money, those services let the users earn passive income, as well as save on fees for transfers, loans, and deposits.
Most of the existing DeFi services are built on the Ethereum blockchain, and the number of new applications in the field of decentralized finance is growing steadily. So, at the moment of writing, the total value locked on smart contracts for Defi applications is $39.65B, according to the defipulse.com portal.
Now it is time to learn more about the Compound protocol itself. Compound is a decentralized application for lending which is built on the Ethereum blockchain. Basically, any owner of a supported cryptocurrency can deposit it into the smart contract, where it joins the liquidity pool and starts generating interest. The interest comes from other users that borrow funds and pay interest on loans.
However, there is one nuance. Until now, it worked pretty much the same way as the bank works with the money. But in the bank, as soon as the funds are withdrawn, they cease to bring interest. When funds are deposited, the Compound protocol generates tokens called cTokens. This way, when Ethereum (ETH) is deposited in Compound, an equivalent amount of cETH will be received by users. These tokens can, after that, be used as collateral for the loan, which essentially means the funds can be spent while they are still earning interest.
The amount of interest earned is determined by the main supply and demand smart contracts of the Compound. If there are a large number of people willing to borrow a certain asset, the smart contract increases the interest rate to attract lenders and make the loan more expensive. Currently, there are nine assets supported on Compound, and all of them are also based on Ethereum, including Tether (USDT), Dai, Wrapped Bitcoin (WBTC), and Basic Attention Token (BAT).
COMP is an ERC-20 token that is used for the governance of the Compound protocol. Holders of COMP tokens and their delegates can discuss, propose and vote on various changes to the protocol.
The researchers argue that once the COMP token became available for trading on major exchanges like Binance and Coinbase, most of the owners decided to sell it. On June 23, just after COMP became tradable on Coinbase, the COMP price dropped from $ 400 to $ 250. Most holders of COMP, Compound's DeFi protocol governance token, use it primarily for speculation, according to a recent study by Flipside Crypto.
Based on the analysis carried out, Flipside Crypto concluded that most of the COMP token holders do not use it for lending and borrowing. These results did not hinder the growth of Compound, which has recently become a leader in the field of decentralized finance, pushing Maker out of the first place. According to DeFiPulse, the number of blocked funds in the protocol is currently close to $ 4,8 billion.
These tokens are distributed between the Compound markets (ETH, USDC, DAI, and so on) in proportion to the interest that was accrued on them. Within each market, 50% of COMP tokens go to lenders and 50% to borrowers.
If desired, users can calculate the return on their investments in Compound in the created calculator.
According to the company's official website, the Compound team consists of:
Robert Leshner (CEO)
Chartered Financial Analyst, former economist, and founder of two software startups.
Geoffrey Hayes (CTO)
Maintainer of Exthereum, technology founder of two startups, led Core Services at Postmates.
Torrey Atcitty (APPLICATION LEAD)
Led mobile development at Postmates, Kahuna, and Aha Mobile.
Calvin Liu (STRATEGY LEAD)
Previously analytics at Gusto, advisor to digital currency startups at Promontory, long-time crypto investor.
Coburn Berry (SENIOR ENGINEER)
Experienced web stack engineer from The RealReal; previously an attorney.
And other experienced engineers, etc.
The Compound protocol and the Defi services, in general, are definitely worthy of your attention, whether you want to earn passive but risk-free income or you just want to buy the protocols' native tokens cheaper and sell them at a more expensive price. The Defi services are showing great dynamics right now, and unsurprisingly,y are really popular. Same goes for the COMP token and the Compound protocol. You should definitely check them both out!