Compound

DeFi

Gauntlet

Rewards

Balancer

<a href="https://bitcoinworld.co.in/compound-settles-governance-attack-as-comp-surges-7-with-new-staking-plan/" title="Compound Settles ‘Governance Attack’ As COMP Surges 7% With New Staking Plan" rel="noopener noreferrer nofollow"></a>
Compound Finance has reached a settlement with crypto whale Humpy and his Golden Boys group, defusing a contentious “governance attack.”
<ul>
 <li style="font-weight: 400">Compound Finance has launched a new staking product allocating 30% of market reserves to COMP holders.</li>
 <li style="font-weight: 400">The new staking initiative follows a settlement with crypto whale Humpy over a controversial $24M COMP allocation.</li>
</ul>
Compound Finance has reached a settlement with crypto whale Humpy and his Golden Boys group, defusing a contentious “governance attack” that threatened to give the group control of nearly $25 million worth of COMP tokens.
On July 30, Humpy announced the cancellation of Proposal 289, which had sought to allocate 499,000 COMP tokens to a yield-bearing protocol controlled by the group.&nbsp;
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 Proposal 289 now canceled <a href="https://t.co/SVOjMGSpUX" rel="noopener noreferrer nofollow">pic.twitter.com/SVOjMGSpUX</a>
 — Humpy (@Titanium_32) <a href="https://twitter.com/Titanium_32/status/1818160161787380037?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">July 30, 2024</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
The proposal had passed by a narrow margin just days earlier, shocking many in the Compound community.
“Proposal 289 is now canceled,” Humpy declared, adding that the ordeal ultimately benefited Compound by bringing attention to the project and paving the way for COMP to become a “yield-bearing asset.”
Indeed, the settlement centers on creating a new staking product for COMP token holders. Bryan Colligan, Compound’s Head of Growth, outlined a plan to allocate 30% of existing and new market reserves annually to staked COMP holders based on their stake size.
“These Staking Rewards will be distributed with the same cadence as the COMP token rewards that currently boost markets on Compound per Gauntlet’s incentive recommendations,” Colligan explained in a governance forum post.
The new staking product will be governed by the Compound DAO and undergo security audits. Risk manager Gauntlet expressed support, stating they are “ready to conduct any requested analyses of proposed mechanisms or designs and help ensure a healthy reserve ratio is maintained.”
News of the settlement sent COMP’s value surging about 7% to $51, bucking the broader crypto market downturn.&nbsp;
<a href="https://wublock.substack.com/p/in-depth-analysis-of-compounds-governance" rel="noopener noreferrer nofollow">According</a> to an analysis of the supposed “governance attack” from Wu Blockchain, Compound Finance remains one of DeFi’s largest lending protocols, with over $3 billion in total value locked.
This isn’t the first time Humpy has stirred controversy in DeFi governance. In 2022, he reached a similar “peace treaty” with decentralized exchange Balancer after attempting to gain control of that protocol.
The Compound incident highlights ongoing challenges in DAO governance. While DAOs aim to decentralize decision-making, they can be vulnerable to coordinated actions by large token holders.&nbsp;
Doo from StableLab emphasized the need for Compound to bolster its governance security, warning of parties potentially “cementing Voting Power by giving extra incentive to stakers.”
The incident also shows us the high-stakes nature of DeFi governance and its corollary difficulties. With billions of dollars at stake, governance attacks pose significant risks.&nbsp;
However, the relatively quick resolution in this case suggests growing maturity in handling such conflicts.&nbsp;
Earlier this month, Compound also suffered a phishing attack on its front-end, adding to the troubles that the DeFi protocol is already facing.
For Compound, the settlement marks a pivotal moment. By introducing fee-sharing for COMP holders, the protocol is improving its tokenomics in a way that could drive more value to long-term stakeholders.&nbsp;
Colligan <a href="https://www.comp.xyz/t/alphagrowth-stake-compound-product/5478?utm_source=thedecentralised.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=compound-s-close-call" rel="noopener noreferrer nofollow">noted</a> that “Staking Compound is the #1 priority for the compound growth program going forward.”

Compound Settles ‘Governance Attack’ As COMP Surges 7% With New Staking Plan

ItsBitcoinWorld

Other articles published on Jul 30, 2024

BREAKING Bitcoin News: Kamala Harris May Choose Anti-Crypto Gary Peters as Running Mate – Here Ar...

Bitcoin Whales Scoop 5,900 BTC In Recent Correction, Recovery Expected Soon?

SEC Moves to Amend Complaint Against Binance, Binance.US, and Zhao: Solana (SOL) May Be Impacted

Trezor’s first hardware wallet turns 10: But is it still any good?

HashKey Capital Backs Catizen.AI Publisher, Signaling Strong Commitment to AI and GameFi

Meet Timi: The Iguana That Inspired Brian's Journey

Join our free newsletter for daily crypto updates!