At the request of Humpy following discussions with Alpha Growth and other Compound delegates, we propose the following staking product that addresses the stated interests of Humpy as a new, recent delegate and COMP holder in return for canceling Proposal 289 due to the governance risks it poses to the protocol.
Staked Compound Product
Fees are accrued from the dynamics of providing liquidity and borrowing, with most going to liquidity suppliers and the remainder generating reserves for Compound which is deposited into market reserves. We propose that 30% of the current market reserves and Net New market reserves generated per year will be streamed to staked COMP holders in proportion to the number of staked COMP they hold.
These Staking Rewards will be distributed with the same cadence as the COMP token rewards that currently boost markets on Compound per Gauntlet’s incentive recommendations.
The Staked COMP token product will be a vault that is controlled by the Compound DAO with the ability to adjust its Risk Parameters (similar to the functionality of current Compound markets) leaving open the ability to alter the % of reserves distributed to staked users to a proportion that best serves the growth of the Compound ecosystem in a sustainable, positive feedback loop.
The Staked COMP token product will be developed through Compound Growth Program resources, audited by the Compound Security Partner, and evaluated by the Compound Market Risk Manager. After this, it will be passed through a Compound DAO governance vote to be deployed on-chain.
Trigger Event
The Compound Growth Program, with backing from major delegates in the Compound community, will execute on the above commitments, given the immediate cancellation of Proposal 289. After which Arr00 has agreed to rescind Proposal 290.
This offer expires at 11:59 pm EST on July 29th, 2024. If the deadline passes without action on behalf of Humpy to cancel proposition 289, the rest of the Compound DAO will move forward with Proposal 290.
I think this would be a positive outcome for all involved. Also believe that staked COMP would be a positive development that should help improve security of Compound DAO governance.
I affirm that proposal 290 will be cancelled once 289 is cancelled. I look forward to exploring a staked COMP solution together with the rest of the DAO.
Hi everyone - I lead growth at Inverse and we only recently added COMP as collateral on FiRM, our fixed rate lending market. While subject to approval by our risk team, yield-bearing sCOMP - especially if it preserves our ability to retain COMP voting rights for users who stake on FiRM - would be even more compelling to users than COMP today.
Thank you for this proposal. Gauntlet supports exploring a Compound staking product. As a service provider to the DAO, we are ready to conduct any requested analyses of proposed mechanisms or designs and help ensure a healthy reserve ratio is maintained.
We have been closely following the recent developments in this governance saga and have offered resources privately to the appropriate parties.
We are here to support all Compound stakeholders and look forward to seeing governance work through this solution. We are pleased to see this issue nearing a reasonable closure and greatly appreciate the participation of all delegates in resolving this matter.
OpenZeppelin is happy to see a potential resolution on the table to ensure governance is protected and community interests are served. We’ve been working closely with many community delegates since Proposal 289 passed and hope this leads to its successful cancellation and positive collaboration with new delegates.
While we are glad that it’s moving to resolution, we believe it’s crucial to consider Compound Governance security in the long term. Our concerns include certain parties cementing Voting Power by giving extra incentive to stakers to them. There should be several governance changes to increase governance security.
Since Humpy didn’t cancelled the proposal 289, it seems like we’ll need to coordinate to build around proposal 290, thankfully submitted by @arr00.
The best option here is probably deploying a new governor who will not consider the vote of the address that the goldCOMP contract is delegating to. Neutralize the social power/capture involved in the proposal 289.
It will maintain the tokens that Humpy bought in the market, and it’s an easier solution, also giving time for delegates to engage and take some security measures.
Market reserves are distributed via the Smart Vault gauge
Users can claim rewards based on how much COMP they’ve deposited (staked) + time in the vault to receive market reserves
This would be a 4626 for easy integration and no time-lock
ADDITIONALLY
we can provide smart contracts to fund the staking contract in a decentralized fashion that bridges market reserves from L2’s to to L1 to pay out rewards
add a contract that dutch auctions market reserves for COMP, creating buy pressure for COMP, and distributes as rewards to users who staked COMP in the Smart Vault
VaultCraft’s Smart Vault infra has been audited by Paladin, C4, and BlockSec. The gauge is a fork of Curve, which has been audited and battle tested.
After following the events of the past few days and considering the options available, Sherlock agrees that the path laid out by this proposal strikes a reasonable balance for different stakeholders in the DAO. We’re available to help support the DAO in any way we can to make this a reality.
In light of the recent discussions about implementing staking in Compound, we at Tally.xyz are excited to propose a solution that we believe will best serve our protocol’s needs: adopting Uniswap’s UniStaker smart contracts built by one of the ecosystems own: @bendi from the Scopelift Team.
Why UniStaker?
Audited and secure: UniStaker was developed by the Uniswap Foundation and the Scopelift team. It has been thoroughly audited, deployed, and is already managing funds successfully.
Preserves governance participation: Crucially, UniStaker doesn’t force token holders to choose between earning yield and participating in governance. This design ensures that our DAO’s decision-making process remains robust and inclusive.
Ready for quick implementation: The contracts are complete and can be forked and/or customized for Compound with minimal effort, allowing for a swift rollout.
Wide frontend support: Tally.xyz has already developed frontend interfaces for UniStaker. Additionally, third-party open-source frontends and subgraphs are available, enabling a diverse ecosystem of tools and interfaces.
Emerging industry standard: UniStaker is rapidly becoming the go-to solution for governance staking across multiple DAOs. By adopting it, Compound aligns itself with best practices in the space.
Strengthens DeFi collaboration: There’s a poetic symmetry in Uniswap, which was the first external team to utilized Compound Governor for governance, now is in a position to offering back this staking solution. It’s a testament to the collaborative nature of DeFi.
Next Steps
Tally is prepared to assist in the integration process and can help get everything ready for deployment. The adoption of UniStaker would position Compound at the forefront of governance staking implementations, ensuring our protocol remains a leader in the DeFi space.
We welcome community feedback and look forward to discussing this proposal further. Let’s work together to enhance Compound’s governance and staking capabilities!
