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Betting against Compound? This DeFi app just made it possible with COMP options


Betting against Compound? This DeFi app just made it possible with COMP options

Compound’s (COMP) meteoric rise is equal parts FOMO and illiquid price pushing, with industry observers drawing parallels with the infamous ICO boom of 2017.

The lending-centric token even made it to Coinbase this week, with the latter notorious for taking a methodical, legal-first approach to projects. 

Thus far, there were limited avenues to bet against COMP price, with only FTX and UMA providing relevant products. However, on Friday, DeFi exchange Opyn said it was listing put options for COMP, providing bears with an avenue to short the token.

Bet against COMP

Styled as a DeFi risk management tool instead of a vanilla exchange, Opyn exclusively provides put options on popular DeFi tokens. The firm even raised $2 million earlier this week to expand its tech stack and product suite.

Source

Ultimately, as CryptoSlate reported earlier, much of DeFi’s attractive yields come from loaning the collaterals out to other traders who, in turn, turn a profit on their capital to pay back COMP holders.

This creates a trading-centric product very similar to what banks did in 2018 — create leverage upon leverage and hand it out to those chasing high returns. 

But one must clearly understand the risks that DeFi yield farming brings to the table. Otherwise, such situations will start becoming more common:

Source

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