Compound holds massive influence over 3 major tokens: Breaking down the "COMP effect"

Compound's effects have been far-reaching, having tremendous influence over a variety of other tokens.

One research firm calls this the "COMP effect," and it tends to be positive for the fundamental strength of the tokens being impacted.

In particular, Basic Attention Token, 0x, and DAI appear to be the tokens most influenced by Compound.

According to data from DeFi Pulse, the total value of the tokens currently locked within Compound is around $630 million, which is $100 million more than the amount locked within Maker, and $330 million more than the total value locked within Synthetix.

Over the past seven days alone, tokens related to the DeFi sector posted an over 7 percent climb, according to proprietary data from CryptoSlate.

Despite being the match that ignited this trend, has been declining over the past few weeks, with early investors cycling their massive profits into smaller tokens.

Some of these smaller tokens have seen bull market-level gains over the past seven days, with Kyber Network climbing 51 percent while many others also see rallies of a similar magnitude.

Data shows COMP is impacting these three tokens in particular.

According to recent research from analytics platform Santiment, Compound has been having a clearly defined impact on the fundamentals underpinning BAT, ZRX, and REP. One of the main impacts COMP has had on these tokens can be seen while looking towards the supply of these tokens on exchanges.

Their price action also appears to be growing increasingly correlated to Compound governance decisions, as they all declined in tandem when a reserve factor adjustment was made for these three specific tokens.