How did BAT become the most widely used DeFi token?

 

According to recent research by the blockchain analysis company Flipside Crypto, Brave’s token, BAT, became the most widely used ERC-20 token in the decentralised finance sector (DeFi) between 19 June and 2 July. According to Dapp.com, „a transaction volume of $931 million was generated from the BAT token, which is higher than the combined volume of Ether and Dai“.

BAT is the token used to encourage and reward the display of ads by users of the Brave browser. The idea behind ad blocking is to encourage ad creators to share revenue with end users who see them and share their personal data, which they often do not know is being tracked and monetized.

Although Brave may be one of the leaders in advertising blockchain space and BAT is frequently marketed by cryptomoney investors, the recent increase in price and trading volume was unexpected.

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What was behind the BAT surge?
According to Flipside Crypto, the recent increase in BAT’s volume and price was related to the evolution of another DeFi project called Compound.

During the last weeks, Compound has been the center of attention in the DeFi space and the recent launch of its COMP token caused a big stir by rising 233% in its first week of trading. As reported by Cointelegraph, COMP also became DeFi’s largest protocol in terms of total blocked value.

The Compound reward mechanism allows users to borrow tokens by depositing an equivalent amount of another token as collateral for that loan. At the same time, lenders earn interest on the blocked tokens in exchange for providing liquidity to the Compound’s lending ecosystem.

The protocol also offers additional COMP rewards to participants based on the amount of interest they have earned or paid for borrowing or lending.

According to Flipside Crypto data, this was the reason for the increased activity, as tokens like Bitcoin Loophole have a high interest rate of 30% for lenders and borrowers.