{"id":138367,"date":"2020-07-04T22:32:31","date_gmt":"2020-07-04T21:32:31","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=138367"},"modified":"2020-07-04T22:39:51","modified_gmt":"2020-07-04T21:39:51","slug":"compound-holds-massive-influence-over-3-major-tokens-breaking-down-the-comp-effect","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/compound-holds-massive-influence-over-3-major-tokens-breaking-down-the-comp-effect\/","title":{"rendered":"Compound holds massive influence over 3 major tokens: Breaking down the \u201cCOMP effect\u201d"},"content":{"rendered":"<p>The launch of Compound (COMP) just a couple weeks ago has provided the decentralized finance sector with a boost that has completely altered its trajectory, ushering in a wave of new DeFi participants while also providing investors with massive gains.<\/p>\n<p><a href=\"https:\/\/cryptoslate.com\/coins\/compound\/\">Compound's<\/a> effects have been far-reaching, having tremendous influence over a variety of other tokens.<\/p>\n<p>One research firm calls this the \u201cCOMP effect,\u201d and it tends to be positive for the fundamental strength of the tokens being impacted.<\/p>\n<p>In particular, Basic Attention Token (<a href=\"https:\/\/cryptoslate.com\/coins\/basic-attention-token\/\">BAT<\/a>), 0x (<a href=\"https:\/\/cryptoslate.com\/coins\/0x\/\">ZRX<\/a>), and <a href=\"https:\/\/cryptoslate.com\/coins\/multi-collateral-dai\/\">DAI<\/a>\u00a0appear to be the tokens most influenced by Compound.<\/p>\n<h2><strong>Compound\u2019s launch ignited a new wave of DeFi growth<\/strong><\/h2>\n<p>Compound\u2019s highly anticipated launch in late-June was an instant success, with the protocol pulling in hundreds of millions of dollars in a matter of hours.<\/p>\n<p>According to data from DeFi Pulse, the total value of the tokens currently locked within Compound is around $630 million, which is $100 million more than the amount locked within Maker, and $330 million more than the total value locked within Synthetix.<\/p>\n<p>This sparked a parabolic uptrend in the sector's growth, which can be seen while looking at the below chart.<\/p>\n<figure id=\"attachment_138368\" aria-describedby=\"caption-attachment-138368\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-138368\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.12.45-AM-1024x503.png\" alt=\"\" width=\"1024\" height=\"503\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.12.45-AM-1024x503.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.12.45-AM-300x147.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.12.45-AM-768x377.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.12.45-AM.png 1214w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-138368\" class=\"wp-caption-text\">Image Courtesy of DeFi Pulse<\/figcaption><\/figure>\n<p>This growth has also created a tailwind that has caused many digital assets that are related to the rapidly growing ecosystem to see massive gains over the past several weeks.<\/p>\n<p>Over the past seven days alone, <a href=\"https:\/\/cryptoslate.com\/cryptos\/defi\/\">tokens related to the DeFi<\/a> sector posted an over 7 percent climb, according to proprietary data from CryptoSlate.<\/p>\n<figure id=\"attachment_138369\" aria-describedby=\"caption-attachment-138369\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-138369 size-large\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.15.52-AM-1024x326.png\" alt=\"Compound COMP DeFI\" width=\"1024\" height=\"326\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.15.52-AM-1024x326.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.15.52-AM-300x95.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.15.52-AM-768x244.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.15.52-AM.png 1264w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-138369\" class=\"wp-caption-text\">Data Source: CryptoSlate <a href=\"https:\/\/cryptoslate.com\/cryptos\/defi\/\">DeFi Tokens<\/a><\/figcaption><\/figure>\n<p>Compound, despite being the match that ignited this trend, has been declining over the past few weeks, with early investors cycling their massive profits into smaller tokens.<\/p>\n<p>Some of these smaller tokens have seen bull market-level gains over the past seven days, with <a href=\"https:\/\/cryptoslate.com\/coins\/kyber-network\/\">Kyber Network<\/a> climbing 51 percent while many others also see rallies of a similar magnitude.<\/p>\n<h2><strong>Data shows COMP is impacting these three tokens in particular<\/strong><\/h2>\n<p>According to <a href=\"https:\/\/insights.santiment.net\/read\/the-comp-effect---how-it-impacts-bat%252C-zrx-and-rep-5888?utm_source=twitter&utm_medium=post&utm_campaign=twitter_comp_effect_article_dino_070120\">recent research<\/a> from analytics platform <a href=\"https:\/\/cryptoslate.com\/companies\/santiment\/\">Santiment<\/a>, Compound has been having a clearly defined impact on the fundamentals underpinning BAT, ZRX, and REP.<\/p>\n<p>One of the main impacts COMP has had on these tokens can be seen while looking towards the supply of these tokens on exchanges.<\/p>\n<p>Santiment notes that investors have been moving massive quantities of BAT, ZRX, and REP away from exchange wallets to \u201cyield farm\u201d \u2013 thus alleviating some selling pressure that would have otherwise been placed on them.<\/p>\n<figure id=\"attachment_138371\" aria-describedby=\"caption-attachment-138371\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-138371\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.32.53-AM-1024x568.png\" alt=\"\" width=\"1024\" height=\"568\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.32.53-AM-1024x568.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.32.53-AM-300x166.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.32.53-AM-768x426.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.32.53-AM-1536x852.png 1536w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.32.53-AM-2048x1136.png 2048w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-138371\" class=\"wp-caption-text\">Data Source: Santiment<\/figcaption><\/figure>\n<p>Their price action also appears to be growing increasingly correlated to Compound governance decisions, as they all declined in tandem when a reserve factor adjustment was made for these three specific tokens.<\/p>\n<figure id=\"attachment_138370\" aria-describedby=\"caption-attachment-138370\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-138370\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.33.40-AM-1024x607.png\" alt=\"\" width=\"1024\" height=\"607\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.33.40-AM-1024x607.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.33.40-AM-300x178.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.33.40-AM-768x455.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.33.40-AM-1536x910.png 1536w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-04-at-10.33.40-AM-2048x1214.png 2048w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-138370\" class=\"wp-caption-text\">Data Source: Santiment<\/figcaption><\/figure>\n<p>As DeFi continues growing in popularity, it will likely only gain more influence over the aggregated cryptocurrency market.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The launch of Compound (COMP) just a couple weeks ago has provided the decentralized finance sector with a boost that has completely altered its trajectory, ushering in a wave of new DeFi participants while also providing investors with massive gains. Compound&#8217;s effects have been far-reaching, having tremendous influence over a variety of other tokens. One [&hellip;]<\/p>\n","protected":false},"author":174,"featured_media":138378,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[46940,15323],"tags":[],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Compound holds massive influence over 3 major tokens: Breaking down the \u201cCOMP effect\u201d<\/title>\n<meta name=\"description\" content=\"Compound&#039;s effects have been far-reaching, with COMP having influence over a variety of other tokens that are involved in the DeFi ecosystem.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/compound-holds-massive-influence-over-3-major-tokens-breaking-down-the-comp-effect\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Compound holds massive influence over 3 major tokens: Breaking down the \u201cCOMP effect\u201d\" \/>\n<meta property=\"og:description\" content=\"Compound&#039;s effects have been far-reaching, with COMP having influence over a variety of other tokens that are involved in the DeFi ecosystem.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/compound-holds-massive-influence-over-3-major-tokens-breaking-down-the-comp-effect\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2020-07-04T21:32:31+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-07-04T21:39:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/compound-effect.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Cole Petersen\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Cole Petersen\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/compound-holds-massive-influence-over-3-major-tokens-breaking-down-the-comp-effect\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/compound-holds-massive-influence-over-3-major-tokens-breaking-down-the-comp-effect\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/#person\",\"name\":\"Cole Petersen\",\"url\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/cole-petersen\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/11\/author-cole-petersen.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/11\/author-cole-petersen.jpg\",\"caption\":\"Cole Petersen\"},\"jobTitle\":\"Journalist\",\"description\":\"Cole is a freelance journalist and university student studying philosophy. 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