Compound Finance has made peace with Humpy, a well-known crypto trader, and his group, The Golden Boys, after a big argument about Proposal 289.
This proposal, which passed in a heated debate, aimed to give $24 million worth of COMP tokens to a program run by The Golden Boys that generates returns.
The proposal was criticized because a small group bought a lot of COMP tokens to influence the vote. The new offer proposes a staking product that aims to satisfy everyone, especially Humpy, who is a delegate and COMP holder.
Controversy Over Proposal 289 and Alleged Manipulation by the Golden Boys
The controversy started when Proposal 289 was passed on July 28, leading to claims that the Golden Boys manipulated the governance process.
The proposal, approved with 682,191 votes in favor and 633,636 against, sought to raise the COMP tokens in the goldCOMP treasury fund from 92,000 to 499,000.
Proposal 289, led by Humpy, aimed to allocate $24 million from Compound’s treasury to a program run by The Golden Boys that generates returns.
The proposal passed amid controversy, leading to widespread criticism and claims of vote manipulation. Critics said that a small group influenced the vote by buying large amounts of COMP tokens from the market.
Michael Lewellen, a security advisor for Compound Finance, expressed concerns on X about several accounts gathering COMP tokens to influence proposals in favor of the Golden Boys’ goldCOMP product.
Other community members, such as Wintermute Governance, Columbia Blockchain, Penn Blockchain, and StableLab, shared these concerns, pointing out that the group repeatedly tried to pass a proposal that had failed before.
In a new forum post by Bryan Colligan at Compound, it was announced that Proposal 289 would be withdrawn to reduce the governance risks it created.
Instead, a new staking product has been proposed to satisfy all parties involved, especially Humpy, who is a recent delegate and COMP holder.
The new staking proposal aims to manage the funds securely and benefit the community.
This proposal plans to improve the use of COMP tokens by giving 30% of the new tokens created each year to COMP holders who stake their tokens. The distribution will be based on how much COMP each holder stakes.
Even though this proposal needs a governance vote by the Compound DAO to be put into action, it has already been backed by Humpy, other Compound delegates, and security experts from OpenZeppelin and Gauntlet.
Proposal 289 Opponent Michael Welcomes Resolution to Protect Compound Governance
Michael, who opposed Proposal 289, said, “OpenZeppelin is pleased to see a possible solution that protects governance and serves the community’s interests. We have been working closely with many community delegates since Proposal 289.”
As a result of this development, the automatic transfer of $24 million from Compound’s treasury was cancelled, according to on-chain data.
here were concerns about The Golden Boys’ intentions, especially since they had tried multiple times to redirect funds to their product, goldCOMP. Their past attempts included two proposals that the Compound DAO had rejected.
Another big concern was how safe the funds would be after they were moved from Compound. There were worries that the funds sent to the ‘Trust Setup’ contract could be at risk, as they would be controlled by a multisig wallet owned by The Golden Boys.
Humpy has also been involved in similar disputes with other DeFi protocols like Balancer and Sushi. In these cases, Humpy gathered a lot of voting power to push through proposals that might benefit his personal interests rather than the goals of the DAO.
FAQs about Proposal 289 and the Compound Finance Controversy
1. What was Proposal 289 about?
Proposal 289 aimed to allocate $24 million worth of COMP tokens from Compound’s treasury to a program run by The Golden Boys that generates returns. It proposed increasing the COMP tokens in the goldCOMP treasury fund from 92,000 to 499,000.
2. Why was Proposal 289 controversial?
The proposal was controversial because it was approved amid allegations that a small group of people bought large amounts of COMP tokens to influence the vote. This led to accusations of vote manipulation and a governance attack.
3. What are the main criticisms of Proposal 289?
Critics argued that Proposal 289 was manipulated by The Golden Boys, who were suspected of accumulating COMP tokens to sway the vote. Concerns were also raised about the security of the funds if transferred to a multisig wallet controlled by The Golden Boys.
4. What has been done to address these concerns?
To address the concerns, Proposal 289 was withdrawn. A new staking product has been proposed, aiming to secure the funds and benefit all parties, including Humpy, who is a delegate and COMP holder. This new proposal plans to distribute 30% of new tokens created annually to COMP holders who stake their tokens.
5. What is the new staking proposal?
The new staking proposal is designed to manage funds securely and align with community interests. It involves giving 30% of newly created tokens each year to COMP holders who stake their tokens, with the distribution based on the amount staked by each holder.
6. Has the new staking proposal received support?
Yes, the new staking proposal has been supported by Humpy, other Compound delegates, and security experts from OpenZeppelin and Gauntlet. However, it still requires a governance vote by the Compound DAO to be implemented.
7. What happened to the $24 million transfer from Compound’s treasury?
The automatic transfer of $24 million from Compound’s treasury was cancelled as a result of the new developments and the decision to withdraw Proposal 289.
8. What are the concerns regarding The Golden Boys’ intentions?
There are concerns about The Golden Boys’ intentions due to their repeated attempts to redirect funds to their product, goldCOMP. Their past proposals have been rejected by the Compound DAO, raising questions about their motives.
9. How does Humpy’s involvement relate to the controversy?
Humpy, who led Proposal 289, has been involved in similar disputes with other DeFi protocols. His actions have raised concerns about his potential to use his voting power for personal gain rather than the broader goals of the DAO.
10. What is the current status of the situation?
The situation has led to the cancellation of Proposal 289 and the proposal of a new staking product. The new proposal aims to resolve governance issues and ensure community interests are protected.
