Compound V3
Last updated
Last updated
Notes on economic model:
Compound is oftentimes used for leverage. For example, if I strongly believe ETH price is going up, I want to long ETH with some leverage. I can go to Compound, deposit ETH as collateral and borrow USDC for example. After that I can buy ETH with borrowed USDC, so when ETH price does go up I can withdraw my collteral and sell all the ETH I hold. Even crazier, I can deposit that ETH we just bought as collteral again, and borrow USDC one more time. The leverage is getting larger and larger by doing so.
