Compound Finance and Humpy Broker Truce

Compound COMP is up by 4.92% as it brokers a truce with pseudonymous whale Humpy and the group The Golden Boys after intense discussions perceived as a governance attack.

The conflict began with Proposal 289, led by Humpy, which aimed to allocate $24 million of Compound’s treasury funds to a yield-bearing protocol by The Golden Boys under contentious circumstances.

The proposal faced significant scrutiny and accusations of vote manipulation, as a small group acquired large amounts of COMP tokens to influence the vote.

In a new forum post by Bryan Colligan, Proposal 289 will be withdrawn, reducing governance risks. Instead, a new staking product is proposed, catering to Humpy’s needs as a new delegate and COMP holder.

The proposed staking product aims to enhance COMP token utility, distributing 30% of fresh token reserves generated annually to staked COMP holders based on their contributions.

Although it requires a Compound DAO governance vote for on-chain implementation, the proposal has received endorsements from Humpy, other delegates, and security experts from OpenZeppelin and Gauntlet.

Michael Lewellen from OpenZeppelin, who opposed Proposal 289, expressed optimism regarding the new resolution aimed at protecting governance and community interests.

Following this development, the automatic on-chain deployment of $24 million was canceled, as indicated by on-chain data.

Initially approved, Proposal 289 raised concerns about the intentions of the Golden Boys regarding Compound’s assets, especially given their history of unsuccessful proposals.

Additionally, there were worries regarding fund security once transferred to the ‘Trust Setup’ contract under a multisig wallet maintained by the Golden Boys.

Humpy’s previous engagements with DeFi protocols like Balancer and Sushi hinted at a tendency to use voting power for personal interests rather than broader DAO goals.