The post Compound considers fee redistribution after $24M COMP truce appeared on BitcoinEthereumNews.com.

Compound Protocol is considering a major shift in its revenue distribution following a recent governance fiasco.  The protocol plans to introduce a fee switch that will allocate 30% of protocol reserves to staked COMP token holders through a new product called stCOMP.  The proposal, led by Compound head of growth Bryan Colligan, aims to enhance the financial utility and attractiveness of COMP tokens by providing yield-bearing opportunities. Like all DeFi lending protocols, Compound’s revenues are generated from fees charged to loan borrowers. A portion of these fee revenues are typically paid to liquidity providers to incentivize protocol liquidity. However, COMP token holders currently do not receive a share of these revenues — as is common with many DeFi protocols, such as Uniswap. Read more: Uniswap token pumps following governance fee switch proposal Ironically, the discussions to return revenue to token holders follow a botched governance attempt to do the same. Compound was widely perceived as being “governance attacked” two days ago by an anonymous delegate group by the name of the Golden Boys. Its de facto leader “Humpy” had acquired $4.5 million worth of COMP from ByBit exchange 88 days ago, which was then used to vote in a proposal at a narrow margin of 52%. Proposal 289 would have approved the payment of 499,000 COMP ($24 million) to a vault controlled by the Golden Boys for use in a DeFi strategy where users could lock up their COMP in a Balancer pool to generate yield. The governance vote was seen as an illegitimate attack as it was the third attempt by the Golden Boys to pass such a vote. There had been two previously failed proposals on May 6 and July 19 that OpenZeppelin had flagged as a potential “coordinated governance attack.”  Now it appears this episode of DAO…

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Filed under: News - @ July 31, 2024 9:44 pm