Governance Attack Allegations
Recently, Proposal 289 passed, allocating 499,000 COMP tokens worth about $24M to the goldCOMP DeFi vault. This vault was created by a group called the Golden Boys. However, some community members believe a governance attack occurred. They allege that Golden Boys affiliates tried to approve the proposal by purchasing more COMP tokens on secondary markets.
Proposal’s Narrow Approval
The proposal went to vote last Thursday and narrowly passed on Sunday. Approval votes exceeded rejections by just 50,000 votes. Michael Lewellen, a security advisor for Compound, pointed out that the proposing account had recently received 95,000 COMP tokens. Other wallets involved had also withdrawn large amounts of COMP from Bybit.
Defense and Market Reaction
Humpy, the alleged leader of the Golden Boys, defended the proposal. He asserted that the investment would be secured by a Trust Setup, preventing misappropriation of funds. Despite this, the price of COMP dropped slightly, from $49.69 to $48.27, a 2.9% decrease.
Ongoing DAO Governance Challenges
Controversies over DAO governance aren’t new. Smaller users often complain that large holders can pass proposals for their own gain, despite broader community disapproval. Such situations highlight that decentralized governance, like much in the crypto space, remains experimental. Therefore, more work is needed to ensure fairer voting processes for all.
