Main Content
- Compound DAO approved Proposal 289, granting 499,000 COMP tokens to a single user.
- This proposal raises concerns about the potential for Compound’s governance to be controlled by a single entity.
Share this article
Composite governance approved Proposal 289 It consists of creating a revenue vault by providing 499,000 COMP tokens to a user named Humpy on July 28th. At the price on the day of approval, this is worth over $25 million. However, users in the community have highlighted this proposal as an attack on Compound’s governance, which could lead to it being held hostage by this whale.
Humpy has been buying COMP tokens for the past three months, which gave him enough voting power to approve Proposal 289. Furthermore, the whale has implemented the same strategy for Balancer’s governance in 2022, as explained by Blockful CEO Alex Netto.
“At first glance, it doesn’t seem like an attack, as this whale has invested a lot of money to gain significant voting power in Compound’s DAO. However, when you understand the behavioral patterns of this user, you start to think again that this is an attack,” Netto added.
In particular, venture capital fund a16z is the largest voting proxy in Compound’s governance, as highlighted by Daniela Chaver, product manager at Blockful. “Their vote could have prevented the approval of Proposition 289, but they didn’t vote. There’s still a lot to understand,” Chaver said.
Moreover, if COMP holders do not step up, Compound’s governance could be held hostage by Humpy. By locking COMP tokens in the yield vault, whales earn more COMP tokens and increase their voting power. “In the long run, this looks like an attack,” Netto concluded.
Share this article