Lots of discussions lately have been around the supply side of COMP - emission speed and distribution between markets. These are major factors but they affect only the supply-side in the COMP capital market.
End of the day, even if someone is a pure yield farmer and immediately drops his farmed COMPs on the market, there is someone on the other side that buys it for a certain price.
Good assets on capital markets maintain a healthy equilibrium between natural demand and speculators’ demand. Speculators have an important role in the price discovery mechanism while natural demand is usually derived from a long-term approach that sees the economic value in the asset and believes some kind of value accrues. This value accrual will provide a chance to sell at a higher price in the future (to other natural demand buyers or speculators).
But for natural demand to occur, data and thorough analysis about the economic potential of an asset must be publicly available and discussed in the idea market (via social media, blogging, etc.)
In traditional capital markets, analysts, investor relations, individual investors, investment banks, and other financial participants play the role of creating a long term natural demand. In Crypto, I believe this role should be taken by the community.
I feel this part of the Compound ecosystem is still highly undeveloped. I did not find even one good document to analyze the COMP tokens’ potential from an economic perspective. This also plays a role in the upcoming Compound chain adoption, as no analysis currently shows the effect on COMP.
Creating strong natural demand for COMP will increase long term holding, improve the decentralization of Compound, and increase value for loyal community members who Hodl COMP.
I suggest that a certain amount of COMP should be allocated to individuals and community members that will generate a high-quality analysis of the comp token attributes, the potential of Compound to serve an integral role in the future DeFi rails, the impact of the upcoming Compound chain rollup, and the potential of the protocol to be worth tens of $B in the future as an infrastructure layer in DeFi.
Best,
Idan