Compound will introduce the staking program in trade for Humpy, a infamous whale accused of launching a governance assault towards the protocol, canceling a not too long ago handed governance proposal.
Compound is floating a brand new staking program for COMP holders as a compromise with Humpy, a infamous DeFi whale accused of launching a governance assault towards the veteran DeFi protocol.
On July 29, Bryan Colligan, the pinnacle of enterprise improvement at Compound, printed a governance proposal outlining plans for a brand new Stake Compound Product that will stream 30% of the challenge’s present and future reserves to COMP stakers.
Colligan famous that this system was requested by Humpy in trade for agreeing to Proposal 289 — which sought to speculate 499,000 COMP price roughly $24 million right into a DeFi vault managed by Humpy, and gave the impression to be rammed via by Humpy and their associates over the weekend.
“We propose the following staking product that addresses the stated interests of Humpy as a new, recent delegate and COMP holder in return for canceling Proposal 289 due to the governance risks it poses to the protocol,” Colligan mentioned. “The Compound Growth Program… will execute on the above commitments, given the immediate cancellation of Proposal 289.”
Colligan added that the proposal would expire at 11:59 pm EST on July 29. Ought to Humpy have didn’t cancel Proposal 289, Compound would transfer ahead with Proposal 290 — blocking Humpy through the use of the Compound group’s multi-sig to deploy a brand new governor contract eradicating governance energy from the delegate behind Proposal 289.
Humpy tweeted that Proposal 289 had been canceled just a few hours in the past. “Glad to have brought Compound Finance to the limelight again,” they added. “StakedComp… finally becoming a yield-bearing asset!
The markets have responded favorably to the resolution, with the price of COMP up 6.2% over the past 24 hours, according to CoinGecko.
Governance attack
Proposal 289 proposed investing 499,000 COMP from Compound’s treasury into goldCOMP, a yield-generating vault from the Humpy-linked Golden Boys team.
The proposal passed with nearly 52% of votes in favor on July 28, despite two previous iterations of the proposal getting shot down by heavy opposition in May and July. The proposals had notably asked for just 92,000 COMP, with security researchers warning that any tokens deposits into the goldCOMP vault would cede their governance power.
In May, Michael Lewellen of the web3 security firm, OpenZeppelin, noted the first proposal was put forward by a new governance delegate who was suddenly allocated 228,000 COMP by five wallets that obtained their tokens from the Bybit exchange. Combined with their own tokens, the delegate commanded 325,333 COMP — more than 81% of the 400,000 tokens required for a governance proposal to meet quorum.
“We alerted the community of the risk that these delegates could be in support of a potential governance attack,” Lewellen mentioned. “The timing of the new proposal and these recent delegations is suspicious.”
Learn Extra: Compound Group Accuses Infamous Whale Of Engineering Governance Assault
