Why I'm Bullish on Compound Finance (COMP Token) - Compound III Explained Simply - video Dailymotion

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Transcript

00:00Welcome back to Decentralized News. Today I'm talking about a very interesting project,

00:05Compound Finance. The token for this project is COMP, that's the Token Ticker Comp,

00:12and you can find it on different types of cryptocurrency exchange platforms, including

00:18the likes of Binance, OKEx, and Bybit, and so forth. You can find the best cryptocurrency

00:24exchange reviews on our main site. So head on over to Decentralized.News. Why am I talking about

00:32Compound Finance today? Stick around and you'll see why I'm bullish on this project. Compound 3,

00:39that is the version 3 of the protocol, has just launched and I've got a whole lot in store for

00:46you in this video. Like and subscribe to the channel and let's get it on. So before we actually

00:53talk about COMP's successful governance proposal, which has been the prelude to Compound 3 launching

01:01and which is supposed to be a streamlined version of the protocol with an emphasis on security,

01:08capital efficiency, and also a better user experience. I think it is also just good that

01:15we just go back to what Compound is for those that aren't already familiar with the project.

01:20So I'm just giving you a quick rundown on what this project is all about. So Compound effectively

01:25launched around 2018. So Compound was actually created by a California-based firm, Compound Labs,

01:36and they've been developing that platform since 2018, pretty much leading that development.

01:43And the goal has always been to allow users to pretty much put idle digital assets to use

01:49and obviously this is a very interesting proposition as far as people wanting to earn yield on

01:57decentralized platforms. So in Compound Finance, you can actually lend and also borrow Ethereum-based

02:06cryptocurrencies. This includes Ethereum itself as well as some other ERC-20 tokens including USDC,

02:14USDT, USDT, USDT, USDT. This is pretty much kind of the focus. So there are no credit checks that are required

02:22or personal identification or anything of that nature as far as just being able to lend and borrow cryptos.

02:31So there are technically no time limits as well as on sort of the assets that you borrow as far as

02:41making payments back on those and what makes that possible is that compound finance is an

02:48over collateralized lending platform which requires you to deposit more of the assets

02:57relative to what you're able to actually borrow so this is in principle what makes this viable

03:06in the sense that you know you can have that buffer between the actual collateral that is held

03:14as deposits and what anyone is able to land on the platform so that is effectively what compound is

03:23all about if you want to check out a more detailed uh sort of a review we have a full review of compound

03:30finance on our main site go check it out on decentralized news this first version that was

03:38powered by compound actually accelerated the growth of defi and we saw that around 2019 around may

03:47there was a second version of a compound which introduced a portable collateral which was these

03:54c tokens and also ushered in progressive decentralization that sort of transformed

04:00compound into a community governance protocol with over a billion dollars of transactions so following

04:09that now we are looking at some of the developments that have happened since then we know that comp

04:16actually did get a uh approval um from uh the global uh credit rating agencies like smp for example right so

04:27they received this is like i think it was a few months ago uh i'm not really i think it was in may

04:33actually this year that uh they did receive a b minus uh credit rating from uh smp global ratings it

04:41actually makes compound finance or the treasury itself the first institutional decentralized

04:46finance offering to be rated by a major credit rating agency and this actually also signals

04:53good progress in the crypto industry as far as maturing as traditional institutions begin to also

05:01sort of judge the risks of digital asset powered financial offerings and it seems like you know

05:07the comp community is pretty much at a um advantage here with being a first mover in a lot of the things

05:15that are happening as far as defi is concerned which is one reason why i am bullish on comp

05:23so i like the token price itself it's uh at the moment currently the market is not doing too well

05:30but comp is sitting at around 47 there you can go check it out and uh just to actually now dive

05:38right into what comp 3 is really all about so they've officially launched because obviously the

05:45governance proposal got passed and uh so now they're saying that uh they are introducing safer risk

05:53management in crypto and uh they say that uh the continued enhancement of uh defi risk practices

06:01will uh continue to demonstrate uh defi's resilience in this pay market in the next uh in the next bull market

06:09as you've seen a lot of uh decentralized lenders including celsius voyager and so forth have uh sort of uh

06:17crumbled and um due to uh just illiquidity and uh just the fact that you know they didn't have

06:25that uh structure that uh you know other protocols that are decentralized like uh comp uh have that

06:34are actually taking into account uh some of these risks and uh putting them together into code on a

06:43protocol level so i think in the first two versions of the protocol uh you saw a pulled risk model uh where

06:51you know one single bad asset could theoretically drain all assets from the protocol because

06:56uh collateral could actually be reused that's why now compound has always sort of unlimited the number

07:03of asset types that it supports and in the latest version now you'll see that c tokens are normal

07:09and also collateral now actually remains the property of the supplier according to the team and compound

07:18three also features a single borrowable asset uh so when you supply collateral it remains your property

07:26and you can never be withdrawn by other users except during liquidation so the first version of

07:33compound will allow uh sort of our users to borrow usdc using eth wrapped btc uh link uni and comp as

07:42collateral so they say that while you won't earn interest on collateral anymore you'll be able to

07:49borrow more with less risk of liquidation and also lower liquidation penalties while spending less on

07:57gas fees so that's pretty much what they're doing there and they say that the latest version as well

08:02launched with a business source license bsl which is meant to pretty much limit the ability of our

08:09other teams to fork the protocols uh open source code without uh governance approval as well so this

08:16scheme is said to have been effective for uh uniswap labs uh when they launched uh v3 under the same

08:22license as well so both uniswap and compound have seen dozens of firefox of their second iteration

08:30of their protocols um with more uh sort of permissive licensing so yeah this is uh according to comp you

08:38simpler safer more efficient and also provides one of the best possible platforms for usdc borrowing

08:46and i feel like you know with everything that you're seeing with blackrock uh partnering with

08:52coinbase and sort of trying to introduce this institutional um side of uh allowing institutions

08:59to be able to buy uh you know real btc and all of these things that are going on as far as uh

09:07just uh more clarity coming to the stable coin space or if there's been already talks and you know

09:14we're looking at uh possibly some bills getting passed uh very soon so that would mean i think uh

09:21you'll start to see especially uh these protocols like uh comp that have uh you know uh agencies

09:30such as uh s&p uh giving some kind of uh guidance overall to institutions in terms of how they rate

09:38uh them etc i think uh is a more sort of institutions uh pile up funds into defi trying to get the best

09:47yield etc it will be ultimately also uh the convergence of uh seeing mass use of uh usdc and other stable

09:57coins and possibly uh people trying to earn yield upon those uh when we're seeing that obviously

10:03uh they are pretty much uh a lower yields still as far as if you uh look at what you can get from

10:11a regular bank versus also what the inflation currently is i think a lot of uh people will be

10:18looking to more funds into these uh types of uh protocols to do that and that is why i feel like

10:26comp has a real good potential to um pretty much perform well and also i think that just the

10:34community in general is uh pretty uh business uh astute and they're doing everything that they can

10:41to pretty much uh keep that in mind that uh for uh the protocol to succeed and uh versus other

10:47competitors they have to just really be uh putting business first this is why i like comp so let me know

10:54what your thoughts are don't forget to check out the links in the description to my books tokenized

10:58trillions blockchain applied and also check out our main site where you can get a whole lot of

11:04uh reviews uh in defi nft marketplaces cryptocurrency exchanges and a whole lot more as far as free tools

11:13etc that you can use to help you figure out a whole lot of these things in the crypto space we have also a

11:20full review of compound on our platform i'll try to leave the link in the description like share subscribe

11:26turn on the notifications i will see you in the next

11:29you

Why I'm Bullish on Compound Finance (COMP Token) - Compound III Explained Simply

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