The post Compound Finance passes controversial $24 million proposal amid governance attack fears appeared on BitcoinEthereumNews.com.

Compound Finance’s decentralized autonomous organization (DAO) has passed a proposal to allocate 499,000 COMP tokens worth around $24 million to goldCOMP DeFi vault 1, a yield-bearing protocol created by Golden Boyz. The drama surrounding the proposal’s passage has sparked concerns about a potential governance attack on the lending protocol. Efforts to pass the proposal started in May with proposal 247, which asked for an investment of 92,000 COMP into the goldCOMP DeFi vault in exchange for 5% annual returns. Under this proposal, Compound DAO will transfer 92,000 COMP to Golden Boys’ multi-sig wallet. The wallet would deposit the tokens into the vault to receive goldCOMP and stake the goldCOMP in a goldCOMP/wETH Balancer pool. How the controversial Compound Finance proposal was passed However, there were concerns about this proposal. Compound Finance security advisor Michael Lewellen noted that the transactions surrounding proposal 247 make it suspicious because several addresses have accumulated COMP tokens from the ByBit exchange with the intention of voting on the proposal. He also questioned why the proposal was not discussed in the forum first, as is usually the case in the Compound DAO. Other stakeholders, including Wintermute Governance, Penn Blockchain, StableLab, and Columbia Blockchain, also resisted proposal 247, leading to its cancellation. A follow-up proposal 279 was submitted with a minor adjustment of a Trust Setup instead of multi-sig. They claimed this would address the concerns about delegating COMP tokens without any oversight from the DAO or clawback mechanism. After failing to pass the second attempt, a third proposal, 289, was submitted. The proposal increased the requested COMP allocation to 499,000 tokens, used the TrustSetup, and updated the PHASE to allow Goldenboys multi-sig call to invest the TrustSetup contract. Proposal 289 has now passed narrowly by a vote of 682,191 to 633,636. The passage is now being…

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Filed under: News - @ July 29, 2024 10:16 am