Bloomberg on Bitcoin Money Market
Bloomberg writes "Put Your Bitcoins in the Money Market," which stretches to link cryptocurrency and money market funds. The odd article is based on an even odder release on the website BitcoinExchangeGuide, entitled, "Compound Helps Earn Interest On Crypto Via Money Market Protocol." Bloomberg says, "Crypto money markets. Cryptocurrency markets keep rediscovering financial history for themselves, I keep saying every day, and now they have discovered money-market funds.... Money-market funds aim to achieve a stable value, but in what currency? One assumes it is whatever gets swept: If you have 100 Bitcoins that get swept overnight on Monday, you'd hope that they'd come back worth like 100.01 Bitcoins on Tuesday, even if those 100.01 Tuesday Bitcoins are worth twice, or half, as many dollars as the 100 Monday ones." The source posting explains, "Compound, found online at Compound.finance, is an open-source lending protocol built on the Ethereum blockchain.... Compound is an Ethereum-based platform that lets you earn interest or borrow ERC20 tokens without managing an order book. As described by the official website, the platform is 'an open-source protocol for algorithmic, efficient money markets on the Ethereum blockchain.' The unique feature behind Compound's money market protocol (aside from getting an $8.2 million seed round investment from Coinbase) is its ability to algorithmically adjust money market interest rates based on asset-specific supply and demand. That means users and applications can frictionlessly exchange the time value of Ethereum assets without needing to negotiate terms, rates, or complex flows." (Editor's Note: Sorry, we thought we should mention, but good luck understanding this one! We also don't recognize any of the principals involved.)
