Yitong
@yitong
Seeing a lot of inflammatory takes on the latest Compound finance proposal so here's my view as someone who works day in and day out on this space: What happened? This is not a technical governance attack, but rather someone executing a PE-style play based on the rules as they are defined. It might be unsavory, but it is permissible within the rules of the system. Who's to blame? 1. The governance system is set up naively where large transfers of funds are just as easy to make as small ones. This is an especially tricky balance for lending protocols that need quorum and threshold to be low enough to enable routine risk management. 2. The delegates did not intervene in what is at the very least a suspicious, if not possibly malicious proposal.
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Yitong
@yitong
What can we learn from this? 1. Better governor set up: this is where per proposal types quorum and approval thresholds could've helped! if you're transferring $25M should require higher consensus than adjustment collateral ratio on a small pool. 2. Votable supply based quorum would've also helped here by raising the quorum automatically as the supply of COMP delegated grows, making the quorum harder to reach if someone decided to aggressively buy and delegate new COMP. 3. Don't count on VCs to vote directly: they seldom can / will due to operational issues with custodians and fear of Ooki DAO. 4. Monitor your actual turn out rate as your security budget, not your votable supply. 5. Run redelegation campaigns to increase active votable supply 6. Pay your delegates to create an incentive for them to be active There are no silver bullets – but good governance design and operations could've prevented something like this
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riz
@rizwankhan
plz follow me back
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