Compound Finance is one of the leading protocol in DeFi space when it comes to lending, borrowing cryptoassets. Lets users deposit cryptocurrencies and earn interest, user can also borrow assets. The interest rates are optimised algorithmically.
This analysis tries to understand the concentration of supply and borrow markets for various cryptocurrencies. Some questions that this analysis tries to answers are
Flipside Crypto database was primarily utilised to perform the analysis.
We define some aspects in limited capacity as follows:
We use two well know inequality metrics Lorenz curve and Gini Index to study assets concentration across various markets.
Image Source: Wikipedia
The Gini coefficient is usually defined mathematically based on the Lorenz curve, which plots the proportion of the total income of the population (y-axis) that is cumulatively earned by the bottom x% of the population.
The Gini index is often represented graphically through the Lorenz curve, which shows income (or wealth) distribution by plotting the population percentile by income on the horizontal axis and cumulative income on the vertical axis.