What happened behind the doubling of Compound, the veteran DeFi leader, in a week?

From June 17 to June 30 this year, Compound, the leader of DeFi 1.0, rose from 27 USDT to a peak of 59.5 USDT. Especially in the six days from June 25 to June 30, the maximum increase was about 100%. As shown in the following figure:

Compound is an algorithm-based mortgage lending protocol that provides users with floating-rate deposits and lending services. As the leading project of DeFi 1.0, it is highly sought after by capital and is also a cornerstone of DeFi Lego. Although Compound has good fundamentals, it is still worth exploring that it doubled in a week when the overall market direction is unclear. We found the following four reasons:

1. On June 17, Compound published an article titled "The Compound Protocol Belongs to the Community" on its official Medium, which explained that Compound launched an on-chain system to freely distribute COMP tokens to protocol users, thus achieving community governance. This decentralization of power to the community has greatly promoted Compound users' support for the community, which is also reflected in the secondary market price.

2. According to Lookonchain’s Twitter, on June 26, a user with the address 0x0D5 deposited $3 million into Binance and withdrew 2.26 million COMP tokens within two hours, which is suspected to be an institutional entry. According to Twitter blogger Yu Jin’s observation, on June 29, a user with the same address 0x0D5 withdrew a total of 170,000 COMP from Binance. The observations of these two on-chain analysis bloggers also indicate or imply that institutions are entering the market from a certain perspective.

3. On June 29, Compound founder and CEO Robert Leshner announced the establishment of a new company, Superstate, which targets the current hot area of ​​RWA. They are committed to purchasing short-term US Treasury bonds and putting them on the chain, making secondary records through blockchain, and directly trading the ownership shares of the circulating funds on the chain. At the same time, Compound announced the appointment of a new CEO, Jayson Hobby, who worked in well-known companies such as Coinbase and Uber. If it is placed in many other projects, the CEO's entrepreneurship is considered a negative behavior, but because the former founder's new entrepreneurial project has the possibility of linkage with Compound in business, and the new CEO has a relatively impressive resume, it may become a driving force for the rise.

4. The first three points are the reasons for the possible rise due to Compound’s recent developments, but the impact of the crypto market environment cannot be ignored. The recent rebound of mainstream currencies such as BTC and ETH will help drive the rise of high-quality blue-chip projects, which also needs to be taken into consideration.