Compound Commits to Decentralization, Launches Governance Token
Compound assumes first-mover position as the truly decentralized DeFi player
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Compound, the Ethereum-based money market DeFi protocol, is taking a step toward complete decentralization.
Compound Committed to Decentralization
Compound has announced plans to launch a governance platform system that is controlled by the community rather than a centralized administrator.
The platform has declared its commitment to decentralization, writing:
“To get there, we intend to fully decentralize the Compound protocol — removing the largest single point of failure (our team), and creating an indestructible, open protocol that can evolve in entirely new ways.”
The Launch of COMP Tokens
The platform will launch Compound governance tokens, COMP, for an initial sandbox period over the coming months. COMP tokens are designed to allow holders to delegate voting rights to any chosen address including their own, another user’s, or to an application.
Participation in governance will extend to any party in receipt of delegation, whether or not they hold COMP tokens.
Robert Leshner wrote in the blog post announcing the move that “the transition to community governance will be managed with a relentless focus on security & stability, and will follow the principle of increasing decentralization.”
In line with the company behind the protocol’s plans decentralization initiative, the change will initially see tokens distributed to Compound’s team and its shareholders, before a gradual distribution to the community.
With almost $150 million already locked up in collateral, Compound is the second-most significant player in the DeFi ecosystem behind MakerDAO.
The announcement signals the Compound team’s preparedness to disperse decision-making power and pursue a pure form of decentralization that befits the ideas implicit in the DeFi movement.