same. will catch up soon. meanwhile

@sassal0x

   
Coin Metrics' State of the Network: Issue 56
Tuesday, June 23rd, 2020
Coin Metrics
Jun 23   

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Market Data Insights
The Compound Effect

While the overall market has remained little changed over the past month with volatility near record lows for this market cycle, Compound’s launch of their governance token has ignited interest in the decentralized finance space. The amount of collateral locked within the Compound platform has surpassed Maker due to their implementation of liquidity mining -- paying out a certain amount of Compound tokens to borrowers and lenders on the platform.

Compound token’s rapid price growth has been reflected in most other DeFi tokens such as Aave, Maker, Bancor, and Kyber Network. This is suggestive of behavior last seen during the ICO-driven market bubble, although Ren and 0x’s muted price performance indicates that some rationality persists.

While financial asset bubbles in mature markets are generally undesirable, financial bubbles in rapidly emerging markets such as DeFi can be a good thing in the long-run because it can incentive the build out of additional infrastructure that normally would not be economical.


Source: Coin Metrics Reference Rates

Tether Supply Growth is Slowing

Since the beginning of the coronavirus-related lockdowns, Tether supply growth has been extremely strong. Here we show Tether’s free float supply, a measure of supply that represents the amount of supply freely available for purchase by investors. Notably, it excludes Tether that has been issued but not yet released. This year, a fairly steady rate of growth brought total Tether free float supply from around 5 billion units to 9 billion units. In just the past few weeks, however, Tether supply growth has slowed considerably, although it is still positive.


Source: Coin Metrics Network Data Pro

Although the assumption that Tether is fully backed by fiat currency is tenuous and not fully proven, one interpretation of Tether supply growth is that it represents new capital inflows into the space. The common narrative is that Tether is printed, sent to exchanges, and then used to purchase Bitcoin or other cryptoassets. Here we plot one-month Bitcoin price growth with one-month Tether supply growth to examine the connection. Recent data points to a tight correlation between the two time series. As Tether supply growth has slowed, Bitcoin’s price growth has also attenuated.