- The Compound DAO recently faced a significant governance attack orchestrated by a group known as the Golden Boys, spearheaded by a prominent whale named Humpy.
- Proposal 290 has been introduced to implement delays in governance actions to thwart similar future attacks.
- Jared Grey, CEO of SushiSwap, has indicated that Humpy’s actions are highly disruptive and have left the Golden Boys scrambling to respond effectively.
Discover how Compound’s decentralized governance is under siege and what measures are being taken to protect it in the future.
Governance Attack on Compound DAO: What Happened?
The Compound Decentralized Autonomous Organization (DAO), which governs the decentralized lending protocol, recently encountered a serious governance attack. The attack was orchestrated by a group dubbed the Golden Boys, led by a prominent whale named Humpy. According to posts on Compound’s forums, Humpy managed to gain control over a significant number of COMP tokens, aiming to influence platform decisions to their advantage.
The Unfolding of Events and Humpy’s Strategy
Jared Grey, CEO of SushiSwap, remarked on Humpy’s actions, noting the significant disruption within the Golden Boys group. “I wouldn’t be surprised if Humpy has infiltrated their team and made them take on new members. They may be scrambling to figure out how to deal with it. He’s very resourceful and cunning,” he stated. The group made multiple proposals intending to shift advantages towards their protocol, goldCOMP, with their initial two proposals being blocked by the community. However, Proposal 289, which involved redirecting COMP tokens to their goldCOMP vault, was successfully passed, raising suspicions of fund misappropriation.
Industry Reactions and Proposed Countermeasures
Alex Netto, the CEO of Blockful, provided insights, stating, “At first glance, it doesn’t look like an attack since this whale invested a lot of money to have significant voting power in Compound’s DAO. However, when you understand this user’s behavior pattern, you start thinking again that this is an attack.” In response to this governance assault, the community introduced Proposal 290, aiming to enforce a delay in governance actions, thereby preventing rapid, unchallenged decision-making by any single entity. This delay would act as a buffer, giving the community more time to address and counter potentially harmful proposals.
User Concerns and the Compound Team’s Response
Compound users voiced their concerns regarding their safety amid the governance attack. For instance, when users sought assurance and asked, “yo are we safe?”, the response from Compound team members was dismissive, stating, “do not at me again. It is against the rules.” This perceived lack of engagement heightened the community’s alarm over security and response protocols within the platform. The immediate aftermath of the attack saw a swift decline in the value of COMP, dropping by over 6%. Nonetheless, the token rebounded and surged by approximately 6% within 24 hours, according to CoinMarketCap data.
Conclusion
In summary, the governance attack on Compound DAO underscores the vulnerabilities within decentralized systems and highlights the need for robust countermeasures. The introduction of Proposal 290 reflects a proactive approach by the community to safeguard against future risks. As Martin Schmidt, co-initiator at Q.org, aptly commented, “This cannot be solved programmatically. They require at least a basic set of spending rules and a sufficiently decentralized mechanism for enforcement.” Moving forward, ensuring such measures will be critical to maintaining the integrity and security of decentralized governance platforms.
