The thirty-second governance proposal would distribute COMP tokens to offset losses incurred by liquidated DAI stablecoin positions. As it stands, a majority vote of 76% is currently against the proposal with around six hours remaining.
On November 26, an anomalous spike in DAI prices on Coinbase caused an off-mark DAI price relative to the other exchanges and liquidity venues. The anomaly caused the liquidations of DAI positions on the Compound platform resulting in the loss of funds for users.
The proposal suggests distributing 55,255 COMP, or around 0.55% of the total supply, to affected users. The compensation works out at 8% of the amount of DAI liquidated, it is paid in COMP with prices calculated from a 14 day average.
Whale Addresses Vote No
The top addresses voting against the proposal to compensate users are Polychain Capital which has almost 50% of the entire vote, Blck, and Dharma. The total number of votes against at the time of press is 681,290.
According to Compound’s governance policies, a majority and at least 400,000 votes need to be cast in favor of a proposal, which is then queued in a time lock and can be implemented after 2 days.
At the time of writing, there are 212,952 votes or just 24% for the proposal with contributions coming from other DeFi protocols such as InstaDapp, the DeFi Pulse Index, and DeFi Rate.
Synthetix founder Kain Warwick also voted for users to be compensated, explaining why in a recent tweet. He stated that Compound Finance is one of the safest DeFi platforms out there but there are risks and liquidations due to anomalous prices are foremost among these;
Oracles For Price Discovery
He added that there is an indirect alignment between COMP holders and depositors, and this initiative would be good for overall trust restoration and stakeholder alignment.
As it stands, the proposal will be rejected in six hours’ time when voting is concluded.