Bitwise Asset Management today announces launch of a new DeFi fund solely dedicated to Compound Finance governance token COMP.
What Is The Bitwise Compound (COMP) Fund?
The new Bitwise Compound (COMP) Fund will invest solely in COMP, the native token of the Compound network. The fund is available to accredited investors for private placement subscription with a $10,000 minimum investment and weekly redemptions. The fund manager intends to pursue public quotation of the fund with a ticker through OTCQX if and when it is eligible.
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Commenting on the launch, Matt Hougan, Chief Investment Officer of Bitwise, said:
“You’d be hard pressed to find a more dynamic and disruptive movement in financial markets today than DeFi. And one critical part of that space right now is Compound, which provides an efficient way for people to lend and borrow crypto assets — and whose community and governance have proven resilient. Our goal at Bitwise has always been to identify the most promising areas in crypto and to give investors the opportunity to understand and access them efficiently. That’s why we’re so excited to launch this fund.”
So what is Compound, exactly… and why does it matter?
Compound is an open-source network that allows people to lend and borrow crypto assets more efficiently. A few noteworthy stats:
- More than $15 billion across 16 different crypto assets currently deposited on the platform;
- $4.6 billion in trading volume for COMP tokens over the past 30 days;
- Current market cap for Compound is roughly $2 billion; Ethereum, by comparison, is $475 billion.
With a sleek user interface and software that sets and adjusts interest rates continually through smart-contract algorithms, Compound has become one of the leading DeFi lending protocols. Someone owning crypto assets ranging from ETH to Uniswap to USDC can lend these assets through Compound and start earning interest on those loaned tokens instantly.
The network’s token, COMP, is a governance token, which means anyone who owns it has a vote in Compound decisions — an advantage that generally becomes more valuable as the network grows. COMP also generates cash flow; the tokens have earned a cumulative $29 million over the past month.
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Who is the fund designed for?
The fund is for investors who want access to COMP in a simple, professionally managed vehicle. It’s also for those interested in gaining exposure to decentralized finance (DeFi) through a small-cap token with cash-flow-like characteristics and valuable governance rights.
This launch builds on several other exciting DeFi-themed Bitwise funds we’ve launched in 2021. Earlier this year, Bitwise launched the Bitwise DeFi Crypto Index Fund — the world’s first diversified basket of DeFi crypto assets — in addition to the Bitwise Uniswap (UNI) and Bitwise Aave (AAVE) Funds.
The custodian of the Bitwise Compound Fund is Anchorage Digital Bank. It became the first federally chartered digital asset bank in U.S. history in January 2021. It currently secures billions of dollars in digital assets.