Compound, the decentralized lending protocol, has seen its outstanding debt on Ethereum surpass $1 billion. It’s like a mountain of debt that keeps growing higher and higher.
According to The Block’s data dashboard, this is the highest it has been in a year. It’s a significant milestone that reflects a shift in the crypto market. Remember the credit crisis that hammered the crypto market in 2022? It led to lenders from BlockFi to Celsius declaring bankruptcy, resulting in a gap in crypto’s market structure. It’s like a game of musical chairs where the music stops, and some players find themselves without a seat.
On July 14, the outstanding debt stood at $1.07 billion. It’s a staggering figure that underscores the scale of borrowing in the crypto world. Compound is a money market protocol where users can borrow and lend assets. The interest rates are determined algorithmically, and COMP token holders govern the Compound protocol. Compound is a digital marketplace where borrowers and lenders meet, governed by the rules set by the community.
The rise in Compound’s outstanding debt on Ethereum is a significant development in the crypto world. It’s a testament to the growing popularity of decentralized lending protocols but highlights the risks associated with borrowing in the crypto market.
