USDT Token Q1 2021

The table of largest moves is overly populated by USDT, with a number of daily moves greater than 5%. We look at the first quarter of 2021 to see this in action below. The first thing that stands out is that USDT spends most of the time at above 80% pool utilisation. This is above the inflection point in the price curve which means that small changes in pool utilisation drive large changes in APY. This is illustrated on the graph on the Compound USDT Market page. Note the periods from March 14th onwards where the pool utilisation drops below 80% - the borrow APY becomes lower and less volatile.

UNI Token March 2021

The UNI Token borrow APY had a major volatility event in March 2021. The borrow APY shot up 16% in a day on the 7th of March. The graphs below tell a similar story to the COMP token event above. UNI loans shot up from $44m to $160m over a few hours on the 7th of March. This pushed the pool utilisation up over 60%, which spiked the borrow APY from 7% to 28% in a short period. More capital was attracted to the UNI pool on the 9th of March which caused a modest drop in the borrow APY. Things came back to normal on after big withdrawal events on the 10th and 12th of March.

In the graph above, we see that the increase in borrow APY coincides with the pool utilisation ratio (loans / deposits in usd) rising sharply on Dec 30. Borrow APY rates return to normal when this ratio dives on Jan 4. We can see from the deposits & loans graph below, that the first ratio change was driven by a simultaneous rise in borrowings and fall in deposit collateral. The situation reversed on Jan 4th. Compound borrow and supply APYs are driven by a price curve which depends on the pool utilisation ratio. See this dashboard for more detail: Compound Borrow & Supply APY

COMP Token Dec 2020 - Jan 2021

From the table above, there was a major volatility event in the COMP market late Dec 2020 which appears to have reverted in early Jan 2021. Let's chart the relevant metrics around this time period:

Largest Changes

Let's examine the biggest changes over this time period so we can drill down into each case and understand the causes behind the largest changes

Identifying Large Changes

Borrowing APY rates in Compound change continuously, and some times dramatically. A measure of rate change is simply the change in rate from one day to the next for a given market. Looking back over the last 6 months, we can identify how many days we say a rise or fall of greater than 2% in the borrow APY across all the Compound markets: