Why is there a withdrawal limit for CoyoCoin (Is trading CoyoCoin prohibited by the government)?

08/13/2023 07:57 • NFT Newsflash • 95 views

Why is there a withdrawal limit for CoyoCoin? This is because the governance token COMP, which is currently the largest decentralized exchange in terms of market value, has been removed from circulation, and over 1 million Bitcoins have been transferred in the past 24 hours. However, as more projects are launched, the liquidity mining rewards will gradually decrease, and these projects will generate more profits.

In order to further ensure the security of user assets, we need a stable funding pool: https://www.comptoplay.net/apps/detail-of-compound-interest-rate-model

According to the official data released, as of July 19, 2020, the price of COMP was 0.036 U/coin, accounting for approximately 10% of the current total circulation.

So what is the role of this lending protocol for Compound? It can use the ETH collateral in Compound as loan interest to generate platform revenue and other fees. But what is Compound?

First, when exchanging ETH in Compound for USDT for borrowing, the system will charge corresponding interest at a certain ratio; second, if users buy a new token with USDT, they can withdraw the new token at any time and then withdraw it directly to others. At this time, users can deposit and borrow USDT, and earn part of the principal from Compound (or bear it themselves). Finally, in the world of DeFi, when people want to participate in DeFi, they actually have no way to obtain price data from the oracle, they can only wait for the price to rise. This method also makes Compound a very popular choice.

In addition, if someone is willing to buy DAI with USDT, they can also choose to pledge some ETH in Compound to do loans, trading, insurance, and other businesses to make money. This means that once a user invests a large amount of capital to use Compound’s assets, a run will occur.

For example, if you lock 1000 ETH in Compound, then in the next 48 hours, you will have 400 ETH left in Compound. If someone wants to sell these ETH, they can find out how much DAI has been borrowed, which will cause the total amount of borrowed DAI to decrease. This is the case even on Compound.

Another point worth noting is that Compound is an open financial application platform based on smart contracts. Its product design concept is open source, and it adopts a design principle and development model with complete independent intellectual property rights. Anyone can carry out code audits in a publicly transparent manner.

Is trading CoyoCoin prohibited by the government?

According to China Securities News, there have been reports in the blockchain media recently that CoyoCoin is suspected of counterfeit issuance of the digital currency “Cola”. Is trading CoyoCoin prohibited by the government? Some users have requested verification. According to contacting CoyoCoin company staff, the response was: “I have no reply.” At present, the official has clarified that “CoyoCoin” does not involve content related to virtual assets, but there are also some illegal activities, so please be aware of legal risks.

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Why is there a withdrawal limit for CoyoCoin (Is trading CoyoCoin prohibited by the government)?

Is trading CoyoCoin prohibited by the government?

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