How Compound got back $25m after a governance attack

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GM, Tim here.

Here’s what caught my DeFi-eye recently:

• Compound DAO reaches a truce with its attacker.
• Cardano initiates its Chang hard fork.
• MakerDAO’s rebrand is just weeks away.

Compound resolves attack

Compound DAO has reached a truce with the group of buccaneering DeFi players who took control of $25 million worth of COMP tokens on Sunday.

The group, called the Goldenboys, used a DAO vote to award themselves 499,000 COMP tokens from the Compound DAO’s treasury.

After a tense 48 hours, pseudonymous Goldenboys member Humpy returned the tokens.

In return, Compound Protocol Head of Growth Bryan Colligan proposed the protocol start sharing fees with COMP token holders.

He detailed the plan in a post on the Compound governance forum.

“I fully approve this message,” Humpy said in response.

Compound is run via a DAO, or decentralised autonomous organisation.

This means holders of the protocol’s COMP token govern the protocol by voting on proposed changes, as well as uses for the DAO’s $96 million treasury.

Many feared that had Compound not reached a deal with the Goldenboys, the group could use their governance power to push through changes that benefitted them at the expense of everyone else.

Compound holds $2.3 billion worth of user deposits.

It’s not the first time Humpy has ruffled feathers in DAO governance.

In 2022, Humpy agreed to a so-called peace treaty with decentralised exchange Balancer after attempting to gain control of the protocol.

Cardano’s big upgrade

Cardano’s Chang hard fork has finally begun.

Stake pool operators on the network are upgrading their nodes to new software. The hard fork will happen once at least 70% of all operators have upgraded.

At that point, Cardano will enter its so-called Voltaire era.

Voltaire will pass some control of the Cardano blockchain to its community.

ADA token holders will receive governance rights and be able to propose and vote on changes to the blockchain.

Cardano’s development since its 2017 inception has been under the purview of the Cardano Foundation, EMURGO, and Input Output Global.

EMURGO is Cardano’s official commercial arm and Input Output Global is Hoskinson’s blockchain development company.

So far, 38% of all operators are running the new software, per data from Cardano staking dashboard PoolTool.

MakerDAO’s ‘Endgame’ is close

Maker co-founder Rune Christensen’s ambitious and controversial Endgame plan is just weeks away from its multi-step rollout.

First proposed in 2022, Endgame will feature a total rebrand, new tokens, new ways to earn yield, so-called subDAOs and artificial intelligence.

It’s all designed to help take Maker and its stablecoin mainstream.

Christensen said the goal is to raise the DAI supply to “100 billion and beyond” — just shy of leading stablecoin Tether’s $114 billion.

Investors appear to like the plan.

The MakerDAO governance token, MKR, has outperformed this year, rising more than 60%, while the value of the entire crypto ecosystem is up 34%.

Maker is a suite of protocols centred around the DAI stablecoin.

Users can deposit volatile crypto assets like Ethereum into Maker and receive DAI in return.

Maker’s Spark protocol offers users 7% annually on DAI deposits.

Data of the week

Coinbase protocol specialist Viktor Bunin crunches the numbers for trading on Ethereum vs Solana.

He found that trading on Solana is more capital efficient, facilitating more trading volume per dollar locked in decentralised exchanges than on Ethereum.

But there’s a caveat: A lot of Solana trading volume involves scam tokens.

This week in DeFi governance

VOTE: Stargate will add Sei Network to its crypto bridge

PROPOSAL: Jupiter aggregator to vote on a 30% JUP token supply reduction

VOTE: CoW DAO to extend revenue model testing period

Post of the week

Crypto Twitter reminds us that with a culture of anonymity, you can never really be sure who you’re speaking to.

What we’re watching

Crypto bridge Wormhole will distribute over $170 million worth of its W token on August 3.

That’s equivalent to 33% of the circulating supply.

Got a tip about DeFi? Reach out at tim@dlnews.com.