Original title: $ 24 million Compound Finance proposal passed by whale over DAO objections
Original article by Zack Abrams, The Block
Original translation: Fairy, ChainCatcher
A recently passed proposal on lending protocol Compound Finance has sparked allegations of a governance attack from community members, who claim that a small group of people forced the proposal through after buying up a large number of tokens on the open market.
Proposal 289, which would allocate 5% of the Compound treasury, or 499,000 COMP tokens worth about $24 million, to the yield protocol designed by the “Golden Boys” for one year, was passed by a narrow vote of 682,191 to 633,636 on Sunday. Voting on the proposal began at 11:40 p.m. Thursday and lasted through the weekend.
However, community members claim there is more to these voting results than meets the eye.
Michael Lewellen, security solutions architect at OpenZeppelin and security advisor to Compound Finance, noted on his X account that multiple accounts were purchasing COMP tokens in large quantities on the open market and had made multiple proposals to transfer COMP holdings to the goldCOMP product created by the Golden Boys.
在 Lewellen 的安全警报发布后，包括 Wintermute Governance、Columbia Blockchain、Penn Blockchain 和 StableLab 在内的几位社区成员也表达了类似的担忧，因为该团队在最初提案失败后又进行了两次尝试。Lewellen 在提案 289 创建后发布的个人意见中表示：“在我个人看来，如果 @Humpy 和 Golden Boys 团队继续坚持试图从协议中获取资金，明显违背所有其他 Compound DAO 代表的意愿，他们的行为可以被视为治理攻击。”
However, after Proposition 289 passed, Humpy, a key leader of the Golden Boys, defended the proposal in an article denouncing Lewellen. Humpy claimed, “‘Stealing funds’ is a false and misleading term, especially coming from a risk expert. The proposed investments are set up in a trust with a series of binding actions that do not allow the funds to be stolen or diverted.”
In an earlier post, Wintermute’s governance account questioned the claim that the “trust setup” actually prevented the transfer of funds, writing: “Any form of withdrawal action (withdrawal) is completely controlled by GoldenBoyzMultisig, which means that the DAO cannot withdraw funds on its own. The DAO needs to vote to initiate the PHASE update first, and then trust GoldenBoyzMultisig to call the relevant withdrawal function.”
Compound 的官方增长团队创始人兼 CEO Bryan Colligan 指出，即使撇开风险不谈，这个机会对 Compound Finance 来说似乎也不那么有利可图。“撇开安全问题不谈，根据我们的早期分析，有很多更好的 POL 机会可以通过与新兴链和去中心化交易所的合作来实现。这些机会的年化收益率大多在 15-20% 之间，有些甚至高达 40% 。”
While Humpy does not appear to be acting entirely alone, at least one of the five members of the Golden Boys multisig wallet claimed to be completely unaware of the proposal. Ogle, one of the other four administrators of the multisig wallet mentioned by Humpy, said: “We used multisig a long time ago and had no idea a vote was taking place and did not participate in the vote.” Ogle then responded more cautiously to the allegations of a governance attack, writing under the proposal: “From my interactions with them last year, they were self-interested but not acting inappropriately, so I’d be surprised if this was done to “hurt” someone. My guess is that this is a way for everyone, including the team, to make money, but I really only just heard about it… so I don’t know any more than you do.”
According to The Block’s Compound price page, Compound’s token price fell nearly 7% in the 24 hours after the proposal passed.
Humpy is not the first governance attack
Humpy was allegedly involved in similar attempts to seemingly exploit the DAO’s governance process for excessive personal gain. In a lengthy event in 2022, Ethereum-based DeFi protocol Balancer engaged in a lengthy battle with Humpy, whose proposal was voted through by whales in large numbers.
“Between April and December 2022, Balancer struggled to align Humpy’s activities with the DAO’s goals through incentives, and it was forced into a cat-and-mouse game to control the whales’ profit-seeking activities through governance,” a Messari report noted.
Although Humpy’s team and the protocol eventually reached a peace agreement, the battle involved Humpy using multiple wallets to control more than 50% of the voting share, essentially unilaterally passing multiple proposals.
Humpy was also accused of launching an attack by SushiSwap’s Jared Grey in March. “As the process progresses, if his governance attack succeeds, he will attempt to extract value from Sushi by creating inflation to support the performance and distribution of its underperforming GOLD token,” Grey wrote in the X post describing the attack.
Grey also responded to the passing of Proposition 289, posting on X on Sunday: “Saddened by the ongoing governance attacks on Compound and Humpy.”
