The decentralized finance (DeFi) lending platform, Compound Finance (COMP), is considering increasing its supply of wrapped Ether (wETH) in its Cormet market. Hence, the platform has sought a vote from its community before taking further action.
Referred to by many as Compound V3, Cormet is the third part of COMP, launched in August 2022 as the protocol’s first multi-chain network to support EVM-compatible systems.
The Cormet USDC market (cUSDCv3) on Ethereum is short of wETH tokens. Hence, Compound Finance seeks a proposal to top up this asset holding.
The previous proposal suggested that the increment be made on the cUSDCv3 considering the current crypto market conditions. “It would be viable to support the increase of the ETH supply cap to enable organic market development.”
If the community approves the proposal through their votes, there would be a 100% increase in the supply of Cormet’s wETH from 75,000 to 150,000. It would also lead to an implementation of Cormet’s newly created features.
At the time of writing, the total value locked (TVL) of Cormet is $227.99 million, as revealed by DeFiLlama. This shows a more than 2000% spike since its debut in August.
COMP Needs Some Boost
Compound Finance has been performing poorly due to the impact of the FTX contagion, with COMP trading at $37.99 at the time of publication. The asset price dropped 22% over the past month, as revealed by CoinMarketCap data.
The aftermath of the FTX debacle has seen the daily trading volume of the asset plunge by over 55%. With the price of COMP further declining in November, large addresses holding the asset ranging between 1,000 and 1,000,000 also dropped significantly.
According to Santiment data, the number of COMP investors has shrunk to 105 compared to last month’s 110. As the whales continue to sell off their holdings over the past month, small traders are doing the opposite by accumulating more crypto assets than ever before.
The on-chain data shows that even as the price of COMP continued to decline steadily, small-scale token holders ramped up their accumulations. Thus, the number of small COMP investors has spiked by 12% in the past month.
As Santiment revealed, the supply of the token on exchanges has jumped by 1% since the last two days of November. At the same time, COMP’s supply outside exchanges dropped 0.11%.
This indicates increased selling pressure as investors exit their trade positions to make profits. Compound Finance still has much to do to navigate the tumultuous market conditions as it seeks more adoption to boost the price uptrend.
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