A report by Flipside Crypto states that investors are liquidating their Compound (COMP) holdings as soon as the opportunity presents itself; with major exchange listings acting as catalyst.
COMP flows. Source: Flipside Crypto.
Exchange listings led to dumps
The report states that as soon as COMP was getting listed on major exchanges like Binance (BNB) or Coinbase, there were observing major flows from the investors to exchanges. In addition, there was allegedly a larger transfer made from “the Compound team to DeFi. This correlates with the unannounced listing of COMP on Uniswap”.
When trading on Coinbase ensued on June 23, it caused “a large drop in price, probably driven by this one investor liquidating.”
COMP price. Source: Nomics.
Most of Compound users are speculators
The report finds that the vast majority of Compound users are speculators who do not engage in lending and borrowing, stating, “Compound users hold 23.8K of the active supply, while wallets who are not using the protocol hold a whopping 680.4K.”
Nonetheless, Compound has experienced rapid growth in the last couple of months. It overtook Maker (MKR) in total value locked (TVL) of Ether (ETH) according to a recent ConsenSys DeFi report:
“On June 21, for the first time, Compound’s TVL surpassed that of Maker’s. By the end of the quarter, $392M USD was locked in Maker and $570M USD was locked in Compound.”
We approached Compound Finance CEO Robert Leshner for comment, but he said “I won’t go on record and debate false information, it gives credence to bad reporting and smears. I will however, after your article is published, point out how flawed it is.”