$9 Million Compound Bailout Proposal Fails
The controversial Compound bailout has failed. Voters who were against the proposal outweighed those in favor of it by a ratio of 3:1.
Share this article
A Compound governance proposal, which would have handed out ~$8.7 million (~55,000 COMP), has failed. It would have partially reimbursed users that were liquidated back on the eve of Thanksgiving.
Compound Attempts Bailout
The proposal aimed to reimburse users who were liquidated due to a price oracle failure the day before Thanksgiving.
If passed, affected users would have received 8% of their total liquidations in the form of COMP tokens. For Example, if a user had 100 DAI liquidated, then that user would have received 8 DAI worth of COMP tokens. The Thanksgiving liquidation resulted in a ~$100 million liquidation in a span of 24 hours. The proposal hoped to reimburse just under $9 million of that sum.
The proposal began as a Compound Autonomous Proposal (CAP) and exceeded the 100,000 votes needed to pass a formal proposal. However, when the proposal was introduced as a formal proposal, it failed to gather the same support.
The formal proposal earned ~212,000 votes for and ~681,000 votes against.
Noteworthy names that voted against the proposal included Polychain Capital, Dharma, Argent, Pantera Capital, and many more.
Kain Warwick, Founder of popular DeFi protocolSynthetix, voted in favor of the proposal. He said that this would align the interests of both the COMP holders as well as the COMP depositors going forward.
Pantera Capital, an investment firm, stated that they had voted against the proposal. They believed that users participating in a permissionless protocol should be aware of the risks they are undertaking, and as such, they should not be compensated.
Gauntlet, a tokenomics firm that has been very active in Compound governance of late, decided to abstain from voting.