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Compound, the crypto lending money market platform based on the Ethereum platform, has received $25 million to expand its activities in a Serie A funding led by Andreessen Horowitz, an investment giant and one of the most visible investors of Coinbase amongst other flagship cryptocurrency and blockchain projects like Ripple.

Their lending is automated and its protocol allows users to earn compound interest on their staked ETHs. Its protocol comprises of open-source smart contracts that adjust interest rates in real-time largely depending on borrowing demand.

Crypto Lending Firm Valued at $90 Million

Rates on staked assets, denominated as tokens, fluctuate depending on supply and demand but are compounded. Conversely, borrowers can receive assets, up to 75% of the stake asset whose value depends on quality, against collateral. If debts are undercollateralized, then a liquidator, who receives 5 percent for action, can liquidate the asset.

With the $25 million, Compound was valued at over $90 million, in a funding round where Bain Capital Ventures, Polychain Capital and Paradigm chipped in. In 2018, Compound raised $8.2 million in a seed round also led by Andreessen Horowitz.

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Chris Dixon, the general partner of the investment firm, said:

“Compound is a lending protocol that is open to anyone in the world, that dis-intermediates banks and allows anyone to earn interest on their money. We’ve worked with Robert and his team for over two years and think they are world class technologists and entrepreneurs.”

Dominance in Ethereum’s Crypto Lending Scene

Compound dominance in crypto lending in Ethereum stands at 81%. At the time of writing, users have earned $42k worth of ETHs as interest in the last year. Furthermore, there is $101 million worth of ETH locked up in the crypto lending DeFi service.

Compound Dominance ETH
Dominance of Compound in Ethereum Lending Space

According to Robert Leshner, the founder of Compound and a trained Economist, a large percentage of borrowers are cryptocurrency companies who are staking their assets and borrowing stablecoins to cater for salaries and other operational costs. There are also crypto traders and sophisticated hedge funds leveraging their ETH holdings for short-term gains.

Understandably, the low and even negative interest rates in traditional markets are pushing investors away to alternatives. DeFi presents an opportunity. Fashioned on the auspices of decentralization and reverting control back to the user, DeFi products and services as crypto lending are executed without intermediation.

By rolling out dapps that use smart contracts that democratize the space allowing everyone to borrow funds without passing through a central authority, it is no surprise that the sector has grown by leaps and bounds.

Summary

DeFi: Crypto Lending Firm Compound Raises $25 Million From Andreessen Horowitz

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DeFi: Crypto Lending Firm Compound Raises $25 Million From Andreessen Horowitz

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Compound, the crypto lending money market platform based on the Ethereum platform, has received $25 million to expand their activities in a Serie A funding led by Andreessen Horowitz, an investment giant and one of the most visible investors of Coinbase amongst other flagship cryptocurrency and blockchain projects like Ripple.

Author

Dalmas Ngetich

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CoinGape

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cryptocoach

Coingape is committed to following the highest standards of journalism, and therefore, it abides by a strict editorial policy. While CoinGape takes all the measures to ensure that the facts presented in its news articles are accurate.

Disclaimer
The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.



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Dalmas Ngetich , 2019-11-15 15:50:40 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.


While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock


Nick Chong , 2019-11-10 12:00:38

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