Compound Grants $24M COMP to “Golden Boys” to Design Protocol; Proposal Sparks Governance Attack Allegations
A recent proposal passed by Compound Finance has sparked accusations of governance attacks within the community. They claim that a small group can forcefully implement the proposal through the approval process after obtaining a large number of tokens on the open market.
Last Sunday, Proposal 289 passed by a narrow margin of 682,191 votes to 633,636 votes. The proposal allocates 5% of Compound's treasury funds (499,000 COMP tokens worth about $24 million) to a one-year interest agreement designed by "Golden Boys." Voting on the proposal began at 11:40 pm on Thursday night and continued until the weekend.
However, community members claim that there are hidden factors behind these vote totals. Michael Lewellen, a security advisor for Compound Finance, expressed in a post on X that some accounts that accumulated COMP tokens on the open market were associated with proposals aimed at transferring COMP assets to the goldCOMP product created by "Golden Boys."
In response to Lewellen's security alert, some community members, including Wintermute Governance, Columbia Blockchain, Penn Blockchain, and StableLab, expressed similar concerns, especially when the organization attempted to pass its initial failed proposal twice.
"In my opinion, the behavior of @Humpy and Golden Boys can be considered a governance attack if they persist in trying to obtain funds from the protocol, clearly opposing the will of all other Compound DAO representatives," Lewellen said in a post after Proposal 289 was created.
However, after Proposal 289 passed, the apparent leader of Golden Boys (known as Humpy) defended the proposal, stating that "'stealing funds' is a wrong and misleading term, especially coming from Compound's risk expert. The requested investment is through a Trust Setup, which has a series of restrictions that do not allow stealing/transferring funds."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Institution: Gold remains bearish in the short term, but further downside is expected to be limited
Cross-chain DeFi platform Folks Finance completes $3.2 million Series A financing