Participating Projects

Partial list. Full dataset available on request.


Project Description

What are the purposes, goals, or scope of the project? If there are metrics to measure success, what are they?

Compound is a DeFi (decentralized finance) protocol created by Compounds Labs Inc, which allows users to send, deposit, lock, and lend any amount to the Compound protocol. If you lock funds, you earn interest on crypto and the interest you earn is denominated in the same token that was lent. The interest rates for supplying and borrowing on Compound are automatically adjusted based on supply and demand. COMP token holders also have the power to make adjustments to interest rates.

Total Value Locked (TVL), Daily transaction volume (lending and borrowing)

COMP is distributed on a daily basis to users of the Compound protocol. Each time a user interacts with the Compound protocol — e.g., by supplying, borrowing or repaying assets — COMP is automatically distributed to the user. New COMP tokens are awarded every day to users of the protocol, based on usage.

What, if any, are the coordinating entities, and what are their functions? (For example, a foundation, software development corporation, DAO, etc.)
  • Investors
  • Company (Compound Labs, Inc.)
  • DAO
How are participants and users of the project identified? (For example, by public/private cryptographic keypair, wallet number, government ID, etc.) Are there restrictions on who can participate? If so, how are they implemented?
  • Ethereum addresses
  • Addresses with more than 65,000 COMP can propose changes to the protocol. Addresses that held voting weight can submit their votes during a 3 day voting period. 
  • COMP allows the owner to delegate voting rights to the address of their choice; the owner's wallet, another user, an application, or a DeFi expert. Anybody can participate in Compound governance by receiving delegation, without needing to own COMP.

Stakeholder Groups

Does the project’s software code delineate groups with particular functions? (For example, those who can propose changes, arbitrate disputes, or vote tokens on behalf of others.)

Slightly, to propose changes you need currently 65k comp tokens (lowered from 100k). Once proposed it is voted on. That said, someone can propose and get backing from others to reach that 65k total.

Goals and Implementation

What behaviors does the project seek to encourage, or discourage? How are such behaviors incentivized?

Compound rewards both lenders and borrowers with COMP tokens to use the Compound protocol using liquidity mining, this way, preventing the decline of lenders and borrowers to gradually drop off and move to similar protocols in the DeFi space. Liquidity mining ensures a high level of liquidity and participation.

2880 COMP tokens are distributed daily with half going to borrowers and the other half to lenders.

COMP is distributed to active participants in the system, ensuring the people who use Compound are the people who get to decide on its future.

(For operational projects): How well are the incentives and governance mechanisms functioning in practice? Are there metrics to measure the effectiveness of governance?

“COMP community governance is not well organized.” (Comp Discourse)

Are there systems to pay for infrastructure, protocol upgrades, development work, network enhancements and/or other work deemed to be in the interest of the network? If so, how do they operate?

Developers have vested COMP or through additional proposals that pay for protocol updates

Governance Powers

What makes a governance decision associated with this project legitimate or illegitimate?

Must follow the standard accepted governance process.

A referendum is successful if: a majority has voted for the proposal and at least 400,000 votes are cast, i.e., ≥ 4% of the supply.

A proposal can also be cancelled if the original proposer loses the required amount of COMP tokens to create proposals after it was added. This is useful to prevent someone from doing a malicious proposal and immediately selling off all his COMP before the value of COMP might drop due to the malicious proposal being accepted.

Who has power to introduce governance proposals, and how does that process operate?

Anybody can participate in Compound governance by receiving delegation, without needing to own COMP. 

COMP is a token that corresponds 1–1 with voting power in Compound governance. Anybody with 1% of COMP delegated to their address can propose a governance action, which consists of simple or complex sets of actions. For example: adding support for a new asset, changing an asset’s collateral factor, changing a market’s interest rate model, or changing any other parameter or variable of the protocol that the current administrator can modify.

Proposals are executable code, not suggestions for a team or foundation to implement. Proposals are subject to a 3 day voting period, and any address with voting power can vote for or against the proposal. If a majority, and at least 400,000 votes are cast for the proposal, it is queued in the Timelock, and can be implemented after 2 days.

If the governance framework itself is disliked, participants can vote to replace it with a new model 

Over time, the community can decide to upgrade them in a form of meta-governance. COMP holders will be the ultimate arbiters of the future direction of every aspect of the protocol.

The Compound protocol is governed and upgraded by COMP token-holders, using three distinct components; the COMP token, governance module (Governor Bravo), and Timelock. Together, these contracts allow the community to propose, vote, and implement changes through the administrative functions of a cToken or the Comptroller. Proposals can modify system parameters, support new markets, or add entirely new functionality to the protocol.

Addresses delegated at least 65,000 COMP can create governance proposals; any address can lock 100 COMP to create an Autonomous Proposal, which becomes a governance proposal after being delegated 65,000 COMP.

Who has policy-setting (“legislative") power to decide on proposals, and how does that process operate?

The community (token holders and/or delegates). If a majority, and at least 400,000 votes are cast for the proposal, it is queued in the Timelock, and can be implemented after 2 days.

Who has implementation (“executive”) power to execute proposals once decided upon, and how does that process operate?

Community (token holders and/or delegates) 

After a proposal has been created, accounts which have voting rights for that proposal vote for or against by calling castVote on the Governor Alpha contract. a. The account's voting weight is determined by the number of votes the account had delegated at the time that proposal became active. This mechanism is in lieu of locking tokens to vote.

After the timelock delay period, any account may call execute to apply the changes from the proposal to the target contracts.

Who has interpretive (“judicial”) power to resolve disputes over application of a policy to a specific instance, and how does that process operate? What can the interpretive power be used to mandate?

In rare cases an accepted proposal can still be cancelled. Currently there still exists a guardian address which has the power to cancel any proposal. It is currently held by the Compound Labs, Inc. itself. In the future this guardian address may be removed.

What checks and balances, or systems of accountability, exist among these governance powers?

Audits, community monitoring through on-chain transparency

Governance Procedure

Governance Procedure

What revisions to governance mechanisms have been made, or are under consideration, and why?

Since the requirement of 100,000 COMP tokens to create a proposal is a very high barrier, after all that's over 10 million USD at the current COMP prices, a new mechanism called Compound Autonomous Proposals (CAPs) was introduced. This will allow anyone with 100 COMP or more to propose a proposal. Any CAP that gets 100,000 votes can be added as a regular proposal.

If there are any significant aspects of the project’s governance that you have not described, please provide details here.

Community governance has replaced the administrator of the Compound

The governance right gives the community complete control to evolve the economics of the protocol and COMP in entirely new ways

Other Information