Compound – the permissionless cryptocurrency lending platform – has replaced the administrative controls of the Compound protocol with community governance.
We’re extremely proud to announce that community governance has replaced the administrator of the Compound protocol. From this point forward, all changes (from supported assets, to system parameters) will originate from COMP token-holders.https://t.co/AchhCwRrCL
— Compound (@compoundfinance) April 16, 2020
With community governance going live, all changes to the lending protocol including supported assets and system parameters will be governed by COMP token holders.
For those unfamiliar, the Compound governance token, COMP, is an ERC20 token on Ethereum allowing owners of the token to delegate voting rights to the address of their choice; the owner’s wallet, another user, an application or a DeFi expert. Anybody with 1% of COMP delegated to their address can propose a governance action.
Compound’s governance token is not a fundraising device or an investment opportunity, it specifically empowers community governance. At the start, Compound’s stakeholders will share the ability to upgrade the protocol with the goal to continuously decentralize over time.
The initial distribution for COMP tokens are as follows:
- 2,368,307 COMP allocated to shareholders of Compound Labs, the core team behind the protocol
- 2,226,037 COMP allocated to Compound Labs Founders and team, subject to a 4-year vesting period
- 373,707 COMP distributed to future team members
- 5,004,949 COMP will be distributed to users of the protocol (more details on this will be released in the coming weeks)
- 0 COMP will be sold or retained by Compound Labs
We can imagine that the COMP tokens allocated to the users of the protocol will be distributed over time to users who have deposits or loans on the platform, however, exact details are waiting to be released.
According to the Compound Governance dashboard, there are currently 45 COMP token holders with 586K votes delegated across 20 voting addresses. With that, we’ve yet to see a proposal created.
Looking at voting power, it’s interesting to see Dharma – the DeFi savings app – at the top of the leaderboard, holding over 100k COMP. Other notable voters on the leaderboard include ParaFi Capital, Compound Founder Robert Leshner, Zerion, Kyber Network, and Compound’s Strategy Lead – Calvin Liu.
With Compound making the move to transition the protocol’s control to a decentralized community, we’re beginning to see a broader trend emerge within DeFi.
Prominent DeFi protocols like Maker, Kyber, and Synthetix (among others) are all looking to make the leap towards decentralized governance and control over each respective protocol. With Compound being one of the first to initiate this transition on mainnet, it’s great to see DeFi protocols putting a focus on decentralizing the protocol and fulfilling the core envisionment of decentralized, open finance.
If you’re interested in learning more about Compound’s governance process, feel free to visit the official Medium post here. For those looking to see Compound’s governance activity and tokenholdings, you can visit the governance dashboard here.
Lastly, if you’re looking for day-to-day updates on Compound and its lending platform, feel free to follow the official Twitter account here!
The post Compound COMP Governance Goes Live appeared first on DeFi Rate.