Large COMP holders have abandoned the idea of launching a wrapped token after accusations of attacking the protocol

The project’s team proposed an alternative option that takes into account the interests of both parties

30.07.2024 - 09:15

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2 min

What’s new? A group of large holders of the Compound Finance (COMP) lending protocol’s governance token have abandoned their initiative after allegations of a project governance attack. Previously, this group called Golden Boys, thanks to the presence of a large number of COMP, had approved a $25 million proposal for them, despite opposition from the rest of the community.

Compound initiative

What else is known? Under proposal number 289, Golden Boys participants hoped to have 499 000 COMP under their management to create a goldCOMP-wrapped token that would provide long-term holders with passive income opportunities. The funds would be held in a wallet controlled by Golden Boys and invested at the discretion of the group members.

In order to create wrapped tokens, users would have been required to place COMP in Golden Boys’ vault, in return receiving goldCOMP tokens that could be placed in special pools.

During the previous two months, the Compound community had repeatedly rejected the initiative, but this time the group managed to outvote opponents thanks to the purchase of a large volume of COMP on the open market. The coins are used to vote on the future development of the project.

On July 30, Golden Boys announced that it had come to an agreement with the Compound team and was prepared to abandon the implementation of Proposition 289. Compound has proposed an alternative that takes Golden Boys’ interests into account but does not compromise the governance process of the Decentralized Autonomous Organization (DAO).

For example, the new proposal recommends allocating 30% of both existing and future market reserves to COMP stakers based on the volume of locked coins. The Staked COMP product would be a vault managed by the Compound DAO.

Other DAO participants, including Gauntlet, Wintermute, and ConsenSys, supported the alternative proposal.

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