Compound Protocol Vulnerable to Governance Attack! Anonymous Whale Casually Claims Millions in COMP, Was it All a Publicity Stunt?

The on-chain lending protocol Compound Finance recently experienced a community dispute related to governance, triggering accusations against the proposal initiator Golden Boys for attempting a governance attack. The incident was later resolved smoothly, with the proposal ultimately being withdrawn and replaced with a new staking proposal.

Compound Faces Governance Attack Risk

On July 28th, Proposal #289 submitted by the Golden Boys team controlled by the alias Humpy passed with a vote of 680,000 to 630,000, raising concerns in the community about Compound facing a governance attack.

Reportedly, the proposal aims to transfer around 499,000 COMP tokens, worth about $25 million, to a treasury and yield protocol created by the team, offering COMP holders a liquidity token based on "goldCOMP" for passive income. However, the specific investment details will be decided by the Golden Boys team.

Repeated Proposals to Transfer COMP to Their Treasury

Earlier in May and July, the team had proposed similar initiatives, both of which were rejected:

• Proposal #247: Suggested sending 5% of COMP treasury to the goldCOMP treasury with a yield agreement

• Proposal #279: Proposed transferring around 92,000 COMP tokens, approximately $4.76 million, to the goldCOMP treasury for a one-year investment

Community Concerns Emerge

Market maker Wintermute and community members expressed concerns, stating that the repeated proposals by Golden Boys could grant the group control over funds, potentially constituting a "governance attack."

According to Proposal #289, over $25 million worth of COMP was scheduled to be transferred to the goldCOMP treasury today, July 30th.

Compound Team Responds to User Concerns: "Stop Bothering Me"

Shockingly, the Compound official Discord administrator responded with an alarming reply to a user's inquiry about safety amid governance attacks:

Stop bothering me, this is against the rules.

Compound Growth Lead Introduces New Proposal to Soothe Concerns

However, following negotiations by Compound's Growth Lead and AlphaGrowth CEO Bryan Colligan, Humpy ultimately retracted the controversial Proposal #289 a few hours ago.

In the new proposal, Colligan introduced a new revenue product, emphasizing that it would satisfy the interests of COMP holders, including Humpy, without compromising the governance rights of Compound DAO:

At Humpy's request, following discussions with Alpha Growth and other Compound members, we propose the following staking product to meet Humpy's interests as a COMP holder and withdraw the controversial Proposal #289 that posed a governance risk to the protocol.

Additionally, it was stated that "once Proposal #289 is withdrawn, the new proposal will be fulfilled with the support of key members of Compound."

Reportedly, the new proposal will allocate 30% of the existing and future COMP market reserves generated annually to COMP stakers based on their staking amounts and ratios.

Humpy Agrees to Withdraw Proposal: Full Support

Humpy expressed full support in the comments section below the proposal, aligning with Wintermute Governance and Consensys in optimism, backing Compound's exploration of staking products.

Most Successful PR Operation or Negotiation Case?

Subsequently, Humpy tweeted on their personal X account, expressing delight in putting Compound Finance back in the spotlight.

Comments below were abuzz with discussions, suggesting that Humpy used seemingly antagonistic proposals as bargaining chips to bring additional earnings and benefits to COMP holders, including themselves.

Meanwhile, some users believed that this could be a rather successful PR maneuver:

No one was talking about COMP before this proposal. Whether you did this for your own benefit, for the benefit of COMP holders, or to get people talking, you succeeded in the end.