THELOGICALINDIAN - Decentralized accounts has become the allocution of the cryptocurrency bazaar in 2024 The best contempo fizz byword amidst in advertising is yieldfarming and at the centermost of it a DeFi badge alleged Compound COMP
But what absolutely is Compound and yield-farming, and if it’s such a hot topic, again why is one options banker so bearish on the token?
What is Yield-Farming? Learn About The Latest Craze in Decentralized Finance
It was the DeFi chic of backward 2024 that helped the cryptocurrency bazaar acquisition a bottom. From the alpha of 2024 to about mid-Feb, Bitcoin rallied, bringing the blow of the bazaar with it.
Ethereum outperformed the arch cryptocurrency by bazaar cap, namely due to the growing bulk of ETH bound up in decentralized accounts applications.
Investors feverishly affairs up the Ethereum accumulation to lock it abroad in applications acquired the asset to abound over 100% afore Black Thursday asleep all gains.
While prices accept not alternate to antecedent highs, the aberration about DeFi absolutely has.
Related Reading | Fund Manager: DeFi Will Propel Ethereum To $1 Trillion Market Cap
But Ethereum isn’t demography the centermost date anymore. Tokens active on its agreement aimed at altered forms of DeFi accept baseborn the limelight. In particular, Compound (COMP) has become the hottest cryptocurrency badge around.
When it comes to DeFi, Compound in beneath than ages captured a lion’s allotment of the bazaar share, alike assault out Maker and added top DeFi altcoins.
Compound can be acclimated for article alleged yield-farming. It’s a new trend demography crypto by storm. Yield-farming leveraging a DeFi artefact or account to acreage absorption rewards by lending out added crypto tokens. In one example, addition was able to acquire 45% APY by leveraging their Basic Attention Tokens application Compound.
Not alone did Compound spike, but so did abounding of the assets that can be acclimated to advantage for crop agriculture additionally saw rallies recently.
1/ I'm abbreviate on $COMP, the fundamentals of the 'governance', accustomed the accessible information, don't accomplish too abundant faculty today.
Won't be afraid to see it abatement beneath $100 unless a acquirement archetypal is proposed soon. – Read abounding thread..
— Theta Seek (@thetaseek) July 2, 2020
Why Is This Options Trader Shorting Compound, The Hottest Crypto Token Going?
So why then, if there’s so abundant fizz surrounding not alone DeFi, but Compound and yield-farming, is one options banker so bearish?
For one, what goes up, charge appear down. And Compound has enjoyed atomic assets back aboriginal actuality listed on Coinbase aftermost month. Listings of this affectionate don’t commonly accept abundant appulse these days, but occasionally it leads to a pump.
The antecedent fizz cutting off could advance to a concise pullback for indicators to reset. But this options banker is advancing to “short” Compound due to ambagious “governance” fundamentals.
His acumen is that the token’s basal agreement is an AUM business, which stands for assets beneath management. Because the asset’s bazaar cap is at $2 billion and $1 billion of it is assets beneath management, the banker says the fair bazaar amount of the asset is abundant less.
COMPUSD is currently trading at $180, afterwards trading about $100 college aloof a anniversary ago. This options banker says, however, the fair bazaar amount is afterpiece to $50, and the asset is due for a abrupt drop.
