Compound Finance Proposal Sparks Controversy Amid Allegations of Governance Attack
Compound Finance, a leading decentralized lending and borrowing protocol, is embroiled in controversy over a possible governance attack.
The recent passage of proposal 289 has sparked allegations of a governance attack, allegedly orchestrated by a voting bloc known as the “Golden Boys.”
The controversy began with discussions on Compound’s governance forums, where insiders had warned of potential governance issues days before the proposal’s approval.
On May 6, Compound Governance rejected proposal 247 due to insufficient votes.
The proposal, titled “Treasury to Invest 5% of COMP holdings into goldCOMP Vault,” was subsequently canceled.
The proposal aimed to create a wrapped COMP token called “GoldCOMP,” which would be managed by the Golden Boys and funded by COMP.
Golden Boy member Humpy explained that this token would offer a new layer of “passive income” for COMP holders through a Balancer pool, facilitating long-term investments.
However, an updated version of the proposal, number 279, also failed to pass during a July 19 vote.
This iteration sought a one-year investment of 92,000 COMP into the goldCOMP Treasury Fund.
The failure of proposal 279 did not quell concerns, as members of the community, including the Wintermute Governance bloc, voiced fears that the proposal would grant the Golden Boys undue control over the funds.
Wintermute Governance highlighted that any withdrawal actions from the vault would be exclusively controlled by the GoldenBoyzMultisig, effectively delegating governance rights to the Golden Boys.
Michael Lewellen of the OpenZeppelin bloc, under the username “cylon,” warned that the Golden Boys’ actions could be seen as a governance attack if they continued to pursue control over the funds despite
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