Are Compound DeFi users riskier since COMP rewards?

Analyze user behavior after the incentives using protocol data

Disclaimer: The content of this post is purely informative and cannot be considered an investment recommendation. The analyzed data may contain errors

Introduction

Since Compound launched its rewards with its COMP governance token, the entire crypto world has been revolutionized and the term “liquidity mining” is increasingly used talking about. This protocol rewards all users who leave liquidity in their protocol, or borrow from it, with governance tokens, dividing the rewards by 50% between them.

In this post, we are going to see how the data has changed since this new reward was included, how users are behaving, and if looking for this reward is making them take more risks when applying for loans.

The data has been obtained from the Compound graphQL API as I commented in this post.

Number of loans

Compound rewards both users who deposit liquidity in the protocol, and those who request loans in it, which has led to the creation of strategies, where the collateral is deposited and, with it, a loan is requested, receiving tokens both per deposit and borrow. Looking at the data on requested loans we see that they have increased significantly since incentives are given