"True Incense Law" is inevitable, Compound, the DeFi agreement, announced the issuance of governance token COMP to achieve a decentralized governance process
Open finance, or Decentralized Finance (DeFi) startup Compound, announced a new plan to decentralize the governance process of its unmanaged loan agreements.
As detailed in a blog post published Wednesday, Compound will issue a governance token, COMP, that allows holders to "suggest, debate, and implement changes to the Compound protocol-without having to rely on or require the Compound team."
Compound CEO Robert Leshner emphasized in the official blog that the token is not intended to raise money for startups. He wrote:
"COMP will strengthen community governance capabilities-it is not a fundraising tool or investment opportunity. COMP will not be open to the public until the decentralized process is complete."
According to DeFi Pulse, which tracks the DeFi project, the compound project currently has a locked value of $ 143.8 million, while the entire DeFi ecosystem has a total locked value of $ 934.3 million. Last fall, the startup raised $ 25 million from investors including a16z, Bain Capital Ventures, Polychain Capital and Paradigm.
According to Leschner, the decentralization process will be gradual.
"During the initial sandbox period, a portion of the governance tokens will be distributed among our company's shareholders, who can delegate voting rights to themselves or the public as they see fit; most of COMP will be hosted and will not participate in governance "He went on to write:
"Encourage the development of Compound-based developers to actively participate in governance, which will be tested in public. As a failsafe, our team will have the right to suspend this governance system during the sandbox (even if it is not locked for 2 days of the agreement Period). When this governance system operates in a reliable and distributed manner, we recommend removing this failsafe-and distributing the remaining tokens to Compound protocol users. "
"We will release more details of the plan in the coming months-stay tuned!" He added.
According to the announcement, users with 1% (or more) COMP tokens can submit governance suggestions. Lessner cited examples such as wanting to add new assets or make changes to the market interest rate model.
"These recommendations need to be executable code and not recommendations for implementation by the Compound team or foundation."
"The voting period for all proposals is 3 days, and any address with voting rights can vote for or against the proposal. If the proposal receives a majority of votes (and 4% of the quorum), the proposal will be in Wait in time lock and it can be implemented in two days. "
"If you don't like a governance framework, that's great! You can vote to replace it with a new model."
After the announcement, the test has been officially launched on the Ropsten network (the testing ground for the Ethereum project). Compound has also released code related to the project on GitHub .