- A dispute about governance was settled between Compound Finance and the anonymous cryptocurrency whale Humpy.
- Proposal 289, which sought to donate $24 million from Compound’s treasury to a yield-bearing protocol, was adopted in a vote that sparked the uproar.
- The plan came under fire and was accused of being manipulated since a tiny group purchased a significant quantity of COMP tokens in order to sway the vote.
In order to meet the needs of all stakeholders, including Humpy as a delegate and COMP holder, a new offer puts up a new staking product.
A truce was mediated by Compound COMP +6.44% Finance with the pseudonymous crypto whale Humpy and his affiliated group The Golden Boys after heated debates and what some community members perceived as a governance attack.
The dispute started when Humpy’s proposal, Proposal 289, was passed in a controversial manner with the intention of giving $24 million of Compound’s treasury cash to a yield-bearing protocol run by The Golden Boys.
After a short while, the plan was widely criticized and accused of being manipulated in the vote, since a small group had manipulated the results by buying a lot of COMP tokens on the open market.
In accordance with the recently published forum post by Bryan Colligan of Compound, Proposal 289 will be rescinded, thereby reducing the threats it posed to governance. An alternative staking product that serves the interests of all stakeholders, including Humpy as a new delegate and COMP holder, has been made available in its stead.
By giving staked COMP holders a share of the 30% of new token reserves created each year, the proposed staking product attempts to increase the usefulness of COMP tokens. The distribution will be in line with each holder’s staked quantity of COMP.
This new proposal has been approved by Humpy and other Compound delegates on the governance forum, along with security specialists from OpenZeppelin and Gauntlet, even though it will need a governance vote by the Compound DAO for on-chain implementation.
OpenZeppelin, a crypto audit company, was strongly against Proposal 289, but Michael Lewellen, a security solutions architect, expressed gratitude that a potential solution was on the table to guarantee governance is upheld and community interests are met. Since Proposal 289, we have collaborated closely with numerous community representatives.
On-chain data indicates that following the most recent development, the automatic on-chain deployment of $24 million from Compound’s treasury was canceled.
Concerns regarding the Golden Boys’ plans with Compound’s assets had been voiced before to last weekend’s approval of proposition 289, highlighting their ongoing efforts to redirect money to their own product, goldCOMP. Their track record of submitting two prior applications that were turned down by the Compound DAO added to the skepticism.
The security of the money after they were moved out of Compound was another problem. Because the money going to the “Trust Setup” contract would be managed by a multisig wallet that belongs to the Golden Boys, there were concerns that it would not be secure.
Similar contentious moves have been taken by Humpy in the past with other DeFi protocols, namely Balancer and Sushi. In these instances, Humpy amassed enough voting power to accept ideas that might have been more in line with his own interests than the DAO’s more general objectives.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
