Compound Protocol is contemplating a significant shift in its income distribution following a latest governance fiasco.
The protocol plans to introduce a payment change that may allocate 30% of protocol reserves to staked COMP token holders by means of a brand new product known as stCOMP.
The proposal, led by Compound head of progress Bryan Colligan, goals to reinforce the monetary utility and attractiveness of COMP tokens by offering yield-bearing alternatives.
Like all DeFi lending protocols, Compound’s revenues are generated from charges charged to mortgage debtors. A portion of those payment revenues are usually paid to liquidity suppliers to incentivize protocol liquidity. Nevertheless, COMP token holders at the moment don’t obtain a share of those revenues — as is widespread with many DeFi protocols, corresponding to Uniswap.
Learn extra: Uniswap token pumps following governance payment change proposal
Paradoxically, the discussions to return income to token holders comply with a botched governance try to do the identical.
Compound was extensively perceived as being “governance attacked” two days in the past by an nameless delegate group by the identify of the Golden Boys. Its de facto chief “Humpy” had acquired $4.5 million value of COMP from ByBit change 88 days in the past, which was then used to vote in a proposal at a slim margin of 52%.
Proposal 289 would have authorised the cost of 499,000 COMP ($24 million) to a vault managed by the Golden Boys to be used in a DeFi technique the place customers may lock up their COMP in a Balancer pool to generate yield.
The governance vote was seen as an illegitimate assault because it was the third try by the Golden Boys to move such a vote. There had been two beforehand failed proposals on Could 6 and July 19 that OpenZeppelin had flagged as a possible “coordinated governance assault.”
Now it seems this episode of DAO drama could have a contented ending in spite of everything, as DAO stakeholders discover an amicable resolution.
Based mostly on the most recent discussion board proposal, the DAO has struck a truce with the Golden Boys to return the authorised funds from Proposal 289 and negate the earlier onchain vote.
In change, the DAO would think about a revenue-sharing program within the type of a brand new staking product, stCOMP, that was already on the protocol’s roadmap.
“We’re contemplating a yield-bearing side for COMP token holders and likewise how you can improve liquidity round COMP swimming pools for draw back safety,” Colligan advised Blockworks. “Proper now, we’re talking to a few or 4 totally different distributors that we’re doubtlessly working a trial with,” he stated.
Governance delegates from Wintermute, Consensys and OpenZeppelin had been seen voicing their approval of the truce proposal.
Earlier than the truce was reached, the DAO additionally sought to move a subsequent proposal that might introduce a two-day time-lock delay on future fund approvals. As a part of the settlement with the Golden Boys, this proposal has additionally been canceled.
The peaceable decision of this battle has been nicely obtained by markets. The token worth of COMP has recovered to its earlier ranges of $51.8, earlier than the governance debacle.
