Altcoin Season is Upon Us! Much of the market’s attention this week was away from BTC, which continues to stay range-bound. Volatility is moving over to the alts, especially the DeFi related names.
Compound’s governance token, COMP, took the spotlight with its release and almost immediate listings on major exchanges such as Poloniex, Coinbase and FTX. At the time of writing, market cap is well over $1b and easily the largest DeFi name. Probably well deserved given its dominance in real utility for the borrow/lend market.
The platform is going to distribute COMP on top of other interest for lenders over the next four years. For sure this will drive capital to the platform but the question is whether this market cap is sustainable. Do users really care about voting? Who will continue to buy these tokens once listing momentum cools down and market makers have sufficient stock?
It’s not just COMP on the rise but other DeFi names like MKR, KNC, and RUNE. It somewhat makes sense for DeFi plays to catch up to centralized exchange names, especially given higher anticipated liquidity from futures.
DeFi security is still a lingering risk at the moment. Just this week, Bancor found critical vulnerabilities in its latest smart contracts. It’s not the first time and it’s happened to other platforms too. Take these things into account before you jump on the bandwagon.
In Other News:
- ETH options open interest reaching ATH; puts > calls.
- BTC difficulty +15%; mining ecosystem in good shape.
- Wirex audit uncovers missing cash; Crypto.com claims no direct impact.
- CFTC chair believes XRP is NOT a security.
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