Compound Finance (COMP) recently took significant steps to resolve a governance dispute. The staking product causing the dispute was withdrawn, and a new staking product proposal will be introduced.
A New Staking Product Proposal Will Be Introduced
The dispute began with tensions between a major cryptocurrency investor using the pseudonym Humpy and a group called Golden Boys. The core issue was Proposal 289, which allocated $24 million from Compound’s treasury to a yield-generating protocol managed by Golden Boys.
The proposal sparked debates within the Compound community, with some members alleging vote manipulation. It was claimed that a small group purchased large amounts of COMP tokens to influence the vote, raising concerns about the governance process’s integrity.
Following these events, Bryan Colligan from Compound Finance announced the withdrawal of Proposal 289 and the introduction of a new staking product proposal. This new proposal aims to protect COMP token holders’ interests and has garnered support from Humpy and other delegates.
90% of New Token Reserves to Be Distributed to COMP Token Holders
The new staking product aims to distribute 30% of the annually generated new token reserves to COMP token holders. The distribution will be based on the amount of COMP each holder stakes. The proposal will be voted on-chain by Compound DAO and has already received support from security experts like OpenZeppelin and Gauntlet.
Michael Lewellen, a security expert from OpenZeppelin, stated that the new proposal is a step towards protecting community interests. He reiterated his opposition to the previous proposal and noted that the new solution has broader acceptance.
Lastly, the automatic distribution of the $24 million fund from Compound’s treasury was canceled. This development raised concerns about Golden Boys’ attempts to direct the funds to their product, goldCOMP. It is known that Compound DAO rejected Golden Boys’ previous two proposals, raising questions about fund security.
