Compound Finance (COMP) has recently addressed a significant governance conflict by retracting the controversial staking product and proposing a new solution. The original dispute centered on Proposal 289, which involved allocating $24 million from Compound’s treasury to a yield-generating protocol managed by the group known as Golden Boys.
Why Did the Dispute Arise?
The friction began between a major cryptocurrency investor using the pseudonym Humpy and Golden Boys, the group behind the proposal. Allegations of vote manipulation surfaced, with claims that a small cohort purchased large quantities of COMP tokens to sway the vote, raising concerns about the governance process’s transparency and fairness.
In response to these allegations, Bryan Colligan from Compound Finance announced the withdrawal of Proposal 289 and introduced a new staking product proposal. This new proposal aims to safeguard the interests of COMP token holders and has already garnered support from Humpy and other key delegates.
How Will the New Proposal Work?
The newly proposed staking product intends to distribute 30% of the annually generated new token reserves to COMP token holders, based on the amount they stake. The proposal will be voted on-chain by Compound DAO and has secured backing from security experts such as OpenZeppelin and Gauntlet.
Michael Lewellen from OpenZeppelin emphasized that this new proposal is a positive move towards protecting community interests and has broader acceptance compared to the previous proposal.
Key Takeaways
- Compound Finance has retracted the disputed staking product.
- A new staking product proposal has been introduced to protect COMP token holders.
- The $24 million fund distribution from Compound’s treasury has been canceled.
The automatic distribution of the $24 million fund from Compound’s treasury was also canceled, raising concerns regarding Golden Boys’ motives to direct the funds to their product, goldCOMP. Compound DAO had previously rejected two proposals from Golden Boys, leading to further questions about fund security.
