Exploring COMP APY
Time to break down the borrow and supply APY for Compound and examine recent changes to each with help from @ah_kek.
So, we know that users go to Compound to borrow and lend crypto, but what kind of rates are each of those groups getting? That’s the question we’re answering with today’s bounty submission from @ah_kek.
We’ll start by examining the Borrow and Supply APYs over time. As you can see in the chart below, the highest borrow APY currently available on Compound is for WBTC.
On the supply side, meanwhile, the highest APY available is USDT, while the lowest supply APY comes from ETH.
These figures aren’t constant, of course. Instead, APY changes often due to the total supply and borrow changes on the platform. Let’s take a look at how APY has changed over time.
As can be seen in the chart above, most of the borrow changes have come from USDC (blue), DAI (Orange), and USDT(green), while on the supply side, they come from ETH(dark blue), WBTC(yellow), USDT(green), DAI(orange), USDC(blue).
So why does USDT boast both the best Borrow APY and the highest Supply APY?
The high supply figure is designed to encourage suppliers to bring more USDT into the pool, while the borrow figure is used to discourage people from taking more USDT loans. This is an attempt to stop the loan amount of USDT from catching up with the supply of USDT, which would prevent borrowers from accessing any more USDT.
There’s plenty more data and insights to be found on Compound liquidation frequency and volume. Just check out @ah_kek’s bounty post on Medium, and check back here tomorrow for more Compound bounty highlights!