BAL and COMP are suffering from their own success

BAL and COMP are suffering from their own success

The two new DeFi token are striving to not be seen as mere flashes in the pan amid attempted manipulation and price crashes

Balancer’s BAL token is the latest DeFi token capturing traders’ attention. Recently released and having followed somewhat in the footsteps of COMP token, it enjoyed an impressive first day of trading. However, now BAL has experienced a degree of manipulation in terms of its issuance procedures.

Exchanges were able to store large amounts of BAL in pools, rather than trading them to warrant Balancer to issue them more tokens, as per their issuance procedure. This was not in good faith with what Balancer had set out to implement.

As such, Balancer were quick to organise a vote to correct the matter by imposing charges on large holdings of BAL, like exchanges. To some, this would look like a quick and adaptive response to the issue, to others however it is a precarious step away from the nature of DeFi.

DeFi’s main selling point is its autonomy and its permissionless smart contracts.  By utilising a governance protocol to change the way BAL works, Balancer have set a precedent for central interference.  Many believe that with proper prior testing, this loophole would have been discovered and could have been fixed before launch.

COMP makes it onto Binance

Meanwhile, COMP has been listed by Binance. This is undoubtedly a commendable feat for any token trying to gain widespread legitimacy and acceptance. However, COMP has been weathering accusations of being a bubble following its recent price crash.

How unexpected this crash was is another matter.  No one could have expected COMP to maintain its steep upward price increase. It was being driven up on the back of some emotional investing and, as is the way of things, began to suffer once it reached heights that early investors were ready to sell.

Indeed, COMP saw an almost 50% decrease in price when an entity, assumed to be an early investor due to the sheer number of tokens they possessed, sold a large quantity of the token. This knocked the token from its ATH of $427 to below $235.

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