Picket’s volume on decentralized lender platform Compound has soared as traders try to maximize the amount of COMP they receive.
Facts from Compound shows the supply of the USD-backed stablecoin has quadrupled from roughly $43.7 million at the start of the week, to over $224 million on Friday. This values bright and early last week, USDT supply had just about crossed the million-dollar mark.
With 2,000 suppliers (lenders) and virtuous over 400 borrowers, USDT one of the largest and most active lending markets on the Compound protocol. For comparison, the purvey for USDC, another stablecoin, is currently just under the $170 million mark – although the number of lenders is far elated at over 5,500.
“USDt’s growth on Compound has been faster than the growth of any other asset in the protocol, by multiples,” rephrased Calvin Liu, Compound’s strategy lead, in a statement.
This bookends a rather manic week for Compound. Total value barred (TVL) has been on a near-vertical trajectory since the release of its new governance token, COMP, on Monday – it broke past the $100 million bounds on the same day, for the first time.
At the time of writing, TVL stood at just under $400 million, according to data install DeFi pulse.
One of the reasons for Compound’s soaring popularity this week might be that users are trying to hear as much COMP tokens as they can. The platform rewards all activity with COMP, so both lenders and borrowers are instantly incentivized to use the platform as much as possible.
This incentive has created a feeding frenzy as COMP soars in price. The representative price has more than doubled in the past 24 hours to $200. The rise has been so rapid that aggregation sites are spark different numbers for market value. At press time, DeFi Market Cap gave Compound a market cap of $1.9 billion, whereas CoinGecko had examined for a more conservative $500 million.
Automated market maker Curv told CoinDesk earlier this week that it was meditate on users depositing USDC as collateral to borrow USDT and using that borrowed USDT as a deposit for borrowing the USDC disregard again. Some users repeat this process up to 30 times – the maximum leverage on Compound – which they use to exaggerate their COMP allocation.
CoinDesk asked Tether whether it thought the surge in USDT supply on Compound could be owners trying to game the system.
“It wouldn’t be appropriate for Tether to comment on this,” the spokesperson said.
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