Trading Comp to USD
The COMP to USD pair allows traders and investors to benefit from developments in the decentralised finance industry. The Compound protocol is attractive because it simplifies the process of lending and borrowing cryptocurrencies for crypto owners, while the associated COMP token is a governance token giving voting rights.
Although COMP was originally launched in mid-2020, it experienced a big rise in value in a relatively short period. Thanks to a number of factors, including the crypto hype, the COMP price has managed to climb by a few hundred per cent in less than a year since its launch.
However, the upward movement in COMP to USD value is interrupted by occasional retracements. The COMP to USD pair also experienced a bounce-back of more than 50% following the retracements.
The COMP price chart shows that this pair can fluctuate as much as 40% during the trading session. Traders need to follow the news related to the Compound protocol and news related to the overall decentralised finance (DeFi) industry.
With the demand for decentralised finance products and services, traders can benefit from changes in the COMP price by trading tokenised crypto pairs on the Currency.com platform. Traders can track the price of the COMP token in real-time on Currency.com.
What is Compound (COMP)?
Compound, also known as Compound Labs, allows owners of cryptocurrencies to lend or borrow crypto and earn interest quickly and securely at lower costs, eliminating the need for traditional financial intermediaries.
With its headquarters in the San Francisco Bay area, Compound was launched in 2017 and was founded by Robert Leshner and Geoffrey Hayes, both known for their entrepreneurial activities. The Compound protocol has grown to become one of the biggest decentralised lenders in terms of the dollar value locked in the protocol. The borrowing and lending interest rates depend on the supported cryptocurrency. Based on the rates available on their markets page, the annual percentage yield (APY) can be in excess of 10% for some cryptocurrencies.
COMP is the governance token created by Compound. It enables token holders to take part in crucial decisions related to the protocol and vote on issues such as new forms of collateral, borrowing power, the applicable interest rate model, etc.
A variety of venture capital firms have supported the peer-to-peer decentralised lending protocol and in 2018, Compound managed to acquire $8.2m (£5.6m) in seed money. In 2019 Compound raised another $25m (£17.9m) both from existing and new investors.
COMP is an ERC-20 token utilised for the Compound protocol's governance that uses smart contracts to lock up the digital assets and produce interest based on the demand and supply in the marketplace.
Some interesting facts about COMP:
COMP is hosted on the Ethereum blockchain.
Owners of COMP tokens can participate in software development and updates with the right to vote on suggestions or make proposals.
COMP owners can delegate their voting rights to other people.
The total COMP supply is capped at 10 million tokens.
4.2 million tokens (42%) of the tokens are distributed to Compound users.
2.4 million (24%) of tokens are reserved for Compound Labs shareholders.
2.2 million tokens are transferred to the Compound founders and the respective team.
The remaining COMP tokens are reserved for incentives aimed at governance and new team members.
Although the crypto-related hype might affect the price of the individual cryptocurrencies and tokens, there are also factors specific to the COMP token that could positively or negatively affect its price.
The supply and demand for COMP are the general factors that might cause changes in its price. While the supply is limited, an increase in demand for COMP tokens should cause a bullish movement. Increase in demand may become evident with the increase in popularity of DeFi products offered through the Compound protocol. The desire of individuals or institutions to have voting rights related to Compound updates will also positively affect the demand for COMP tokens.
Broadening the number of digital assets offered for lending and borrowing on the Compound marketplace might also affect the token price. The increased acceptance of COMP tokens on different exchanges will expand its availability, putting upward pressure on price. Also, expansion of derivative instruments related to the Compound token could contribute to price fluctuations.
The upsurge in the popularity and acceptance of decentralised lending and borrowing activities could increase the demand for Compound products and affect the COMP price. The number and strength of DeFi competitors is another factor that could cause a rise or depreciation in the COMP price. Negative effects might come from the potential manipulations with the digital assets available in the Compound markets.
How to invest in Comp?
This token has the potential to offer a variety of trading opportunities. Perhaps the most obvious way to invest in COMP or other cryptocurrencies is buying them through a crypto exchange. However traders will need to find the relevant exchange that offers the specific crypto or token and they could end up with accounts on multiple exchanges.
It’s difficult for traders to find every digital asset available for trading on a single crypto exchange. A direct purchase means that you will need to store your assets in one of the available crypto wallets, which complicates the trading process even further.
Another more flexible and less complicated way to invest in COMP is to trade a derivative instrument associated with the COMP token. One example of such instruments are the tokenised assets available for trading on the Currency.com trading platform. These assets will mimic the price changes in the underlying assets. The attractiveness of the tokenised crypto pairs is that you can easily enter and exit position, which means that you can easily execute your orders, unlike the process to buy or sell cryptocurrencies through an exchange from your digital wallet.
The speculation related to the future price changes of the COMP to USD value is performed in the same way as if you were trading the pair on the crypto exchange. Tokenised crypto pairs also come with a margin offered by Currency.com and this margin enables trades to make higher gains even with limited trading capital.
Why trade COMP to USD with Currency.com
- Advanced charts and tools
Access to 70+ technical indicators and analysis tools, powerful charts, real-time price alerts and notifications.
- Crypto to cash. Seamlessly
Fund your account and withdraw fiat with your credit card, bank transfer or a crypto wallet.
Start with as little as 0.002 COMP and enjoy the power of 20x leverage.
- Smooth trading experience
Instantly buy tokenised assets with Compound and at competitive prices. Store your holdings safe and transfer with ease.
- Negative balance protection
Manage your risk with guaranteed stop-loss and take-profit orders. Never lose more than you put in.