Think Ethereum and other crypto coins are overvalued? Now you can make money when their prices fall via Compound, which launches its money market protocol for shorting cryptocurrencies today. The Coinbase and Andreessen Horowitz-funded startup today opens its simple web interface allowing users to borrow and short Ethereum, 0x’s ZRX, Brave’s BAT, and Augur’s REP token, or lend them through Compound to earn interest.
Compound users visit its site through a Web3 browser such as MetaMask or Coinbase Wallet and enter their Ethereum price. They can then view the interest rates for borrowing and shorting or lending and earning interest for each of the supported tokens. There’s also a transparency dashboard users can view to check up on all the assets moving through the protocol and see what Compound is earning. It charges 10 percent of what borrowers pay in interest, with the rest going to the lender.
Compound’s protocol isn’t just useful for crypto haters, or HODLers who want to generate interest instead of just having their coins gathering dust in a wallet. It could also make crypto exchanges like Coinbase or Robinhood less attractive to users because leaving their coins there comes with the opportunity cost of not lending them for profit. Meanwhile, shorts could pop the volatile crypto bubble and push prices to more sensible and stable levels. That’s market health is a critical precursor to big banks and traditional investors diving into crypto.
from TechCrunch https://ift.tt/2Qdan1Q
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