Compound Finance, a leading decentralized lending protocol, is embroiled in controversy over a possible management attack. The recent passage of Proposition 289 sparked accusations of a management attack, allegedly organized by a voting bloc known as the “Golden Boys.”
The controversy began with discussions on Compound management forums, where insiders warned of potential management problems days before the proposal was approved.
The community is grumbling about the COMP proposal
on May 6, Compound Governance rejected Proposal 247 due to insufficient votes. The proposal, titled “Treasury to Invest 5% of COMP assets into goldCOMP Vault,” was subsequently canceled. The proposal sought to create a packaged COMP token called “GoldCOMP,” which would be managed by the Golden Boys and funded by COMP.
Golden Boy member Humpy explained that this token will offer COMP holders a new layer of “passive income” through the Balancer pool, facilitating long-term investments. However, an updated version of the proposal, number 279, also failed to pass during the July 19 vote. This iteration called for an annual investment of 92,000 COMP in the goldCOMP Treasury Fund.
The failure of Proposal 279 did not assuage concerns, as members of the community, including the Wintermute Governance bloc, expressed fears that the proposal would give the Golden Boys undue control over the funds.
Wintermute Governance stressed that any withdrawal of funds from the safe would be controlled solely by GoldenBoyzMultisig, effectively delegating management rights to Golden Boys.
Michael Lewellen of the OpenZeppelin bloc, operating under the username “cylon,” warned that the Golden Boys’ actions could be seen as an attack on governance if they continue to seek to take control of the funds despite opposition from other DAO delegates.
Propositions 289 and 290
The controversy intensified on July 28, when Proposition 289, submitted by the Golden Boys, was approved by a narrow majority: 682,191 in favor and 633,636 against. The proposal increased the amount of COMP requested for the goldCOMP treasury from 92,000 to 499,000, a significant increase. The approval of Proposal 289 means thatit is scheduled for implementation on July 30.
