{"id":139470,"date":"2020-07-17T14:00:57","date_gmt":"2020-07-17T13:00:57","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=139470"},"modified":"2020-07-17T07:10:53","modified_gmt":"2020-07-17T06:10:53","slug":"declining-compound-yields-may-be-fueling-comps-intense-downtrend","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/declining-compound-yields-may-be-fueling-comps-intense-downtrend\/","title":{"rendered":"Declining Compound yields may be fueling COMP\u2019s intense downtrend"},"content":{"rendered":"<p>Popular DeFi protocol <a href=\"https:\/\/cryptoslate.com\/companies\/compound\/\">Compound<\/a> (COMP) has been seeing a massive influx of new users since its launch late last month.<\/p>\n<p>The hype surrounding this launch fanned the flames driving the DeFi sector\u2019s growth, which helped lead to the rise of multiple competing protocols that have since eaten into Compound\u2019s market share.<\/p>\n<p>The COMP token\u2019s price action has been closely tracking the protocol\u2019s positioning within the sector, and it has now erased nearly all the gains that came about as a result of the platform\u2019s recent launch.<\/p>\n<p>A sharp decline in the yields offered on Compound has also perpetuated this decline.<\/p>\n<h2><strong>Yields on Compound slide lower as competing protocols gain traction<\/strong><\/h2>\n<p>The recent parabolic growth seen by many protocols and related tokens within the decentralized finance sector came about due to tremendous yields that users were farming to earn exorbitant profits.<\/p>\n<p>In many cases, these yields totaled at over 100 percent on an annualized basis, allowing users to garner high returns with somewhat limited risk.<\/p>\n<p>Multiple governance changes and the rising popularity of competing protocols have led yields on <a href=\"https:\/\/cryptoslate.com\/coins\/compound\/\">Compound<\/a> to decline drastically.<\/p>\n<p>Blockchain analytics platform Santiment spoke about this trend in <a href=\"https:\/\/insights.santiment.net\/read\/5912\">a recent blog post<\/a>, in which they explain that DAI is now the best asset to yield farm, offering an annualized return of just over 10 percent for ten thousand DAI.<\/p>\n<blockquote><p>\u201cWe are currently in the DAI phase, where DAI is still the best coin to use for farming COMP. Previously it was USDT, followed by BAT.\u201d<\/p><\/blockquote>\n<p>They also note that this marks a decline from the yields offered just a week ago when DAI\u2019s APY sat around 14 percent.<\/p>\n<h2><strong>COMP price erases parabolic gains as investors lose interest<\/strong><strong>\u00a0<\/strong><\/h2>\n<p>An abundance of competing protocols coupled with sliding yields have caused COMP\u2019s price to see a notable downturn in recent weeks.<\/p>\n<p>Currently, the token\u2019s price is trading at $154, marking an over four percent decline from where it was just 24-hours ago.<\/p>\n<p>This latest movement lower is simply an extension of the downtrend seen throughout the past couple of weeks.<\/p>\n<p>After peaking at $360 in late-June, Compound\u2019s price has since shed nearly 60 percent of its value.<\/p>\n<p>One technical factor driving this decline could be some large pre-launch investors offloading their holdings.<\/p>\n<p>Data from <a href=\"https:\/\/cryptoslate.com\/companies\/santiment\/\">Santiment<\/a> shows that the top 10 largest non-exchange wallet addresses have sold a total of 870,000 COMP tokens since the protocol\u2019s launch.<\/p>\n<figure id=\"attachment_139471\" aria-describedby=\"caption-attachment-139471\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-139471\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-16-at-2.54.51-PM-1024x605.png\" alt=\"Compound COMP\" width=\"1024\" height=\"605\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-16-at-2.54.51-PM-1024x605.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-16-at-2.54.51-PM-300x177.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-16-at-2.54.51-PM-768x454.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-16-at-2.54.51-PM-1536x907.png 1536w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/07\/Screen-Shot-2020-07-16-at-2.54.51-PM-2048x1210.png 2048w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-139471\" class=\"wp-caption-text\">Data Source: Santiment<\/figcaption><\/figure>\n<p>Unless governance changes make it so that yields begin climbing again, a confluence of mounting competition and selling pressure from the largest Compound holders could place continued pressure on the token.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Popular DeFi protocol Compound (COMP) has been seeing a massive influx of new users since its launch late last month. The hype surrounding this launch fanned the flames driving the DeFi sector\u2019s growth, which helped lead to the rise of multiple competing protocols that have since eaten into Compound\u2019s market share. The COMP token\u2019s price [&hellip;]<\/p>\n","protected":false},"author":174,"featured_media":137491,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[120,46940,15323],"tags":[65197],"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>Declining Compound yields may be fueling COMP\u2019s intense downtrend<\/title>\n<meta name=\"description\" content=\"A sharp decline in the yields offered on Compound has perpetuated the price decline that COMP has seen throughout the past few weeks.\" \/>\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\/declining-compound-yields-may-be-fueling-comps-intense-downtrend\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Declining Compound yields may be fueling COMP\u2019s intense downtrend\" \/>\n<meta property=\"og:description\" content=\"A sharp decline in the yields offered on Compound has perpetuated the price decline that COMP has seen throughout the past few weeks.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/declining-compound-yields-may-be-fueling-comps-intense-downtrend\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2020-07-17T13:00:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-07-17T06:10:53+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2020\/06\/compound-slide.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\/declining-compound-yields-may-be-fueling-comps-intense-downtrend\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/declining-compound-yields-may-be-fueling-comps-intense-downtrend\/\"},\"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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