Compound prices react after margin trading addition on Gate.io

• Gat.io this week added Compound (COMP) margin and lending options encouraging its clients to engage with the governance token, with users able to get up to 3X leveraging and interest of 3.65%-365% APR.
• The token has in the last few days surged to reach a new all-time high, in a time when the wider crypto market is struggling to stay in the green zone.

Gate.io recently announced that it was introducing Compound (COMP) margin trading and lending. This will allow users to leverage up to 3X on their COMP. In addition, the exchange also introduced COMP lending. Users can either borrow or lend the token. Those lending have the chance to earn a passive income of between 3.65%-365% APR.

As a trader, you can borrow COMP to short it or borrow USDT to long it. For holders, you can lend your COMP to margin traders to earn interest on your holdings.

Since the announcement COMP has recorded a healthy performance climbing as high as $650 to mark a new all-time high. This year, the coin has more than tripled having turned the year at the $150 level. At the time of press, the digital asset has retracted to $547. Its total market cap has also shot up significantly, pushing it to position 42 in market ranking. Bulls will be keen to retest the ATH again and possibly find support above this in the coming week.

Compound leads the way

The Compound protocol is one of the earliest lending platforms deployed on the Ethereum blockchain. The mainnet was launched back in 2018. It hugely enjoyed DeFi popularity in much of 2020 and 2021 and at the time of press has $8.1 billion in total value locked (TVL). According to Messari, Compound is one of three leading DeFi lenders on Ethereum. The other two are Aave and MakerDAO. All three held a record $25 billion from lenders in Q1.

The lending sector went parabolic during the first quarter of 2021.

DeFi’s most popular lending platforms reached $25 billion, the highest the sector has ever seen, including

+ @AaveAave
+ @compoundfinance
+ @MakerDAO pic.twitter.com/MDtf63djXz

— Messari (@MessariCrypto) April 23, 2021

DeFi tokens down by 50%

The DeFi market has in recent weeks seen tremendous growth with the TVL ever-growing. However, the DeFi tokens have been susceptible to the wider market crash experienced in the last couple of days. According to data from Coin Market Cap, this has dropped to $90.47B, marking a 54% drop in the last 24 hours. Some of the largest losers are Uniswap and Chainlink which have lost roughly 20% in the last 7 days.

The DeFi market is still promising according to many analysts. The market is believed to bring a more traditional approach to cryptocurrencies, acting as decentralized financial institutions.