[AlphaGrowth] 2025 Compound Growth Program V3 Consolidated

Proposals
21

Hi @jmo, thank you for sharing your thoughts on the AlphaGrowth 2025 Compound Growth Program proposal. You have a lot of questions about affordability, burn, and ROI which are great, let’s address them with a clear breakdown of the numbers.

The DAO’s Current Spending: A Quick Overview

To set the stage, here’s a snapshot of the DAO’s major annual expenses:

  • Liquidity Mining Incentives: $10.7M/yr, recently increased to $12.2M/yr with the Polygon Morpho deal (managed by Gauntlet).
  • Growth Program (AlphaGrowth): $4.2M/yr.
  • OpenZeppelin (Security): $4M/yr.
  • Gauntlet Services: $2M/yr.
  • WOOF: $1.8M paid from the $4.2M Growth budget.
  • Grants Program: $1.125M/yr.

Total Burn: Approximately $25M/yr. Incentives dominate at ~50% of the budget, while AlphaGrowth is a smaller piece of the pie. Now, let’s address your concerns.

Direct Concerns

The 2025 proposal is $7.1M, up from $4.2M last year—about 25-26% of the current burn. For context, traditional software companies allocate varying amounts to growth: Atlassian spends ~15-16% of revenue on sales/marketing, while Salesforce is at 43%. Our $7.1M aligns with a goal of adding $1B in TVL, building on last year’s $814M gain. By contrast, the $12.2M in incentives primarily maintains existing TVL. For example, AlphaGrowth’s $800k Arbitrum campaign captured $220M in TVL—a strong ROI. With $12.2M, we believe similar efficiency could unlock another $1B approximately generate $4MM in reserves.

The Data from Dune shows AlphaGrowth and WOOF as the only line items driving TVL growth last year. Without these efforts, TVL would have flatlined despite the burn. While the original $17M proposal was a stretch (intended to spark discussion), $7.1M reflects a more focused ask. The real burn pressure comes from Gauntlet managed incentives, not Growth.

Not every initiative succeeds, and we appreciate the feedback. Mantle remains active with potential and is looking for the right liquidity partners and structured products. Optimism’s quarterly grants align us with the Superchain vision, though adoption hasn’t fully materialized yet. That said, AlphaGrowth delivered $814M in TVL in 2024 through new assets and markets. Gauntlet managed incentives, at $12.2M, didn’t drive net TVL growth. We’re focused on learning from these cases to refine our approach.

WOOF, funded at $1.8M within the Growth budget, is an R&D initiative, exploring staking, new chains, and markets. Morpho is a strong player, and we’re not aiming to outpace them overnight. A year ago, WOOF was a three-person team, today, it’s scaling and refining and getting better every day. At ~8% of burn, it’s a modest investment for the amount of potential upside, unlike larger fixed costs that don’t directly impact TVL ($4M for OpenZeppelin + $16M for Gauntlet [2M Service + $12.2M incentives]).

The jump from $4.2M to $7.1M (70% increase) supports new priorities: $1B TVL, sandbox growth, retail vaults, and a revamped site. Scaling it back to $4.2M is an option, but it limits these ambitions. On runway: Assuming $25M annual burn, $50M reserves give ~2 years runway, $100M gives 4 years. We’re happy to collaborate on a detailed analysis. We have asked Gauntlet to contribute to the 2025 plan many times to no response. Gauntlet’s bigger burn should warrant equal scrutiny.

Suggestions for Burn Reduction

We agree burn needs trimming, but Growth isn’t the primary issue. Here’s a potential path:

  • Incentives: Reduce from $12.2M to $4M (2/3 cut). Saves $8.2M. AlphaGrowth can sustain TVL growth.
  • Security: Lower from $4M to $1M (3/4 cut). Saves $3M. Compound’s maturity allows leaner security spending that doesn’t require $4M/year to audit copy pasts.
  • Maintain Growth: keeps TVL growth momentum which increases revenue back to the DAO to promote treasury sustainability.

This cuts $11.2M, dropping burn from ~$25M to ~$14M/yr and making the DAO profitable, with extended runway. Incentives and security offer the most savings without stalling growth.

Cuting Waste and Moving Forward

AlphaGrowth isn’t straining the DAO, it’s driving results. The Dune chart highlights $750M in TVL from our work, while $12.2M in incentives alone didn’t move the needle. We’re committed to efficiency and open to refining our scope.

It’s easy to critique without offering an alternative solution.

Super direct question @jmo. As the co-founder of Gauntlet the highest Budgeted Service Provider in the DAO (with your voting power right behind Humpy and a16z).

What’s your vision for Compound?

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22

Didn’t you already make executive decision to force/reallocate budget from the “integrations/developer” fund to support the “revamped” site you proposed and outsourced development of? Compound has no interest in paying for things twice.

If such was the case, sentiment would not feel so bad and WOOF! wouldn’t be saying there is no leadership. I’m afraid there is little appetite left in the community to vote FOR AG. Thank you for your considerable contributions and look forward to coordinating a peaceful transition.

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I appreciate the thorough response. However, saying our contribution burn is bigger because we optimize the COMP incentives is not a good-faith argument. C’mon.

Distributing ownership to users is one of the coolest things about DeFi. It’s so prevalent that if you don’t do it, you are at a systemic disadvantage. You propose cutting incentives drastically - I think that’s something that the Gauntlet team should probably try to analyze a bit. If we can do so and remain competitive, then it’s hard to argue with that

I guess one thing here is that I don’t really think four years of runway is enough. Compound has just been around a long time, and so it doesn’t really feel like a start up to me. Is the Compound DAO going to … raise money in the next few years? I don’t even know how that would work. In the absence of that, the DAO would then have to turn a profit in that timeframe. Going to be hard to do so with a ton of burn

And one follow-up - I like that you tried the Mantle and Optimism deployments. We have to try stuff. That’s what I like about the Polygon partnership that just went through voting - it’s trying something different. It’s just hard to get excited about the spend when there isn’t great alignment in the community on a strategy. I imagine it’s extremely frustrating putting together some of the only proposals on a path forward to anemic community response. However that response may be indicative of the confidence in the path you present. Sometimes it’s hard to tell on here as engagement is kinda low

Compound has a great brand and existing user base. This is obviously not a compelling ‘vision’, but Compound should:

  1. See if this Polygon thing works. If this thing gets less TVL than Mantle, you should absolutely rub it in my face
  2. Try to continue to test out different approaches, mindful of spend, to find one that works
  3. Double down on whatever does

The better the community manages its runway, the more chances Compound will have to find a sustainable path forward.

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24

Correct and site will cost maintenance and upgrades. RPC’s alone are going to be 36-48k/yr.

Public Sentiment is down because it’s related to a live restructuring and realignment for the DAO it’s scary.

You are taking his words out of context. Without AG there is no leadership.

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25

The price of the proposal has always been denoted in COMP, if the proposal had passed when the price of COMP was $125, the only difference would be that after hedging, the Growth program would have had even more capital to support Compound, the impact to the treasury would have been almost identical. At the same point in time the annual COMP Gauntlet distributes as incentives was the equivalent of $30.5M, almost twice the growth program budget. We can debate market price fluctuations if you’d like @jmo, however I’d rather debate the actions of the growth program itself, and second Bryan’s question on what your plan is to ensure Compound’s eventual path to sustainability.

Will do, we look forward to pointing out that Mantle’s incentives haven’t yet been distributed, and dollar for dollar spent we’ll be happy to show you when Mantle brings more revenue back to the Compound treasury than the Morpho deal. Healthy competition is what drives innovation.

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26

Yes they have been; this was answered in the original 2025 renewal program. Back then there were 2121 COMP remaining, now there are Negative, AlphaGrowth is currently spending its profits to maintain Compound’s relationships while the DAO decides its next steps.

@cmrn same question to you, Throughout the tenure of AlphaGrowth’s growth program you’ve done a great job of criticizing without providing any alternatives. If you see another path that eventually secures Compound as a sustainable business, please let the community know.

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27

False. An outsourced agency is only slightly representative of leadership anyway. Numerous community members, including myself, WOOF!, Robin, and more, have stepped, or are ready to step up, as would happen naturally in any decentralized community reorganization.

Brother, you’ve withheld feedback on my Compound v4 temp. check for weeks at this point. I think in saying this as I already have, it may be saying enough: Thank you for your considerable contributions and look forward to coordinating a peaceful transition.

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The core issue I believe we’re faced with here is getting AlphaGrowth to a place where they feel comfortable stepping aside, allowing the Compound community to move forward.

I don’t know where you’ve been. Maybe vacation? My solutions have been very well supported here, shared open source work (onchain rewards), and led Refinancing that had potential to save DeFi users millions, which were ultimately lost in the Radiant hack. I’ve laid the groundwork to facilitate billions in liquidity transportation to and through Compound.

My actions, not just words, demonstrate a long term commitment to the community’s success. @rossgates, while I respect your perspective, I must firmly assert questioning my efforts, or those of others who have also worked tirelessly to grow Compound, is unwarranted. Let’s focus on constructive dialogue and solutions that benefit the entire community.

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Fair, but if we are looking to cut costs this is the biggest line item and your team controls this burn.

On a separate note, Not really sure why but I sense there we can work something out let’s chat this week to figure out alignment.

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Regarding this proposal, Gauntlet has voted No.

The DAO should carefully assess whether this proposal aligns with Compound’s long-term interests. Open Zeppelin has noted that the requested 142,047 COMP (~13% of the COMP in the Comptroller) lump-sum transfer to a multisig controlled by AlphaGrowth raises significant governance and treasury management risks.

OpenZeppelin has repeatedly flagged these transfers as high-risk, noting governance centralization, absence of enforceable controls, and deviations from established treasury management practices. Noting the total budget request is over $7 million and requesting payment as a lump sum, these critical concerns remain unresolved. Gauntlet finds it concerning when explicit audit feedback to ensure the DAO’s best interests is not addressed with an appropriate level of diligence. How the DAO engages with oversight and risk management directly impacts its credibility with partners and users.

Given these considerations and consistent warnings from independent audits, the DAO can benefit from considering growth strategies that offer greater transparency, accountability, and measurable outcomes.

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Gauntlet does not control the flow of COMP incentives; the DAO does. Gauntlet recommends changes, but the DAO is always in control over whether to implement them via on-chain governance.

The on-chain proposal describes this proposal as a “renewal”. It would be more accurate to call it an expansion. Renewal carries an implication of funding at a similar scope and level, not a suggested mandate expansion with a significant increase in requested COMP.

Now, AlphaGrowth’s approach to BD and growth for Compound is definitively not my style – to be fair, that was part of the appeal in onboarding them to the DAO. The team is bold, scrappy, willing to rustle feathers, and dogged in their efforts to collaborate with other DAOs, foundations, and businesses to drive activity and development on Compound. They pulled a small miracle extricating the DAO from the worst consequences of the third GoldCOMP proposal.

They also play loose with facts and figures; I have done my best to point out the most egregious examples over the past year when I can, but the example at the top of this post will suffice for proof of concept. They engage in aggressive behavioral engineering within and beyond the DAO to drive outcomes (e.g. the admission above that they intentionally over-budgeted the V1 of this proposal to drive discussion). They had previously taken steps to frame @growcompound as the official Compound Finance account on X (fortunately renamed to Compound Growth after community pushback) and have proceeded to advertise a podcast and memecoin-related content on it that are tangentially and not-at-all related to the DAO, respectively. To their credit, they tend to delete these posts when directly called out on it, but the DAO shouldn’t need to police this.

Overall, I have been inclined to give AlphaGrowth the benefit of my many, many doubts, preferably with support at more of a maintenance level than a multiple of their previous year’s budget. Posts from AlphaGrowth leadership on socials today teasing about wanting to censor a DAO participant for comments opposing this proposal (of course now deleted) helped push me over the line into Against on this proposal, but more importantly, my intent to vote Against is rooted in a belief that they really can get it right and address DAO members’ shared concerns about the current proposal with one more round of revision.

I still think the AlphaGrowth x Compound story could have many successful chapters to come. But the team needs to get serious about incorporating the consistent feedback the community has given it about the scale of the proposal; the use of an Aera vault; and other reasonable input about navigating overlaps with other Service Providers’ scopes. Incorporating only the convenient feedback and side-stepping the inconvenient stuff is a recipe for separation.

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32

Revisions are great getting closer to the right answer!

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No one responded to this on the other thread, but can someone please tell me what country is Aquifer DAO located? What is the entity type?

It seems like a significant amount of funds are proposed to be held by this DAO for the benefit of the Compound community (i.e. you will distribute such COMP as grants, or otherwise return them back to the community if unused). But then the community needs to indemnify you if you are negligent in holding those funds? Does that mean that if you get hacked and you lose our COMP because you were negligent in your own security, we need to pay any losses you incur?

It seems like their is no performance standard you will be held to in the first place (and not clear how you are judging your past performance and what was based on general market dynamics versus your efforts), and even if you act really bad, Compound will also cover any expenses you incur because of that? Seems like you can’t lose and don’t have to act well

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Great questions.
Aquifer DAO is a Marshall Islands Entity.

Community indemnifies all service providers:
CGWG Compound GWG Terms of Service - Google Docs
OZ : 2023-9-19 Compound Terms and Conditions - Google Docs
Gauntlet: Gauntlet

Security: in a security incident as it currently stands, No the DAO would not be liable.

Our performance is shared here as a dune dashboard:
https://dune.com/dima_woof/alpagrowth-x-woof
Our mandate was 4 Chains, 8 Markets, 500MM TVL, 25k Users, 10MM reserve growth.

image
image1940×874 166 KB

We nailed and exceeded every performance metric we said we would do. This time we are looking to double our efforts and double TVL and reserve growth, which seem to be what matters.

Thank you for the questions.

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36

Would like to understand in which areas it’s widely believed that AG is absolutely irreplaceable (or where it’d be preferable not to replace them). This could help us in understanding if a reorganized structure is even plausible for Compound DAO at this stage.

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If AG committed to stopping being involved in anything more than advisory on development-related initiatives, I know they wouldn’t be faced with the shortage of funds issue and I wouldn’t have had any gripe. WOOF! is clearly overloaded (Bobby Bot, Sandbox, New Assets, New Chains, side projects, etc) and the fact I have to bring this up, and that @Doo_StableLab has to come on and say grant projects aren’t being delivered, is not good for Compound. One can only hope for change and clear comms if AG were to stay involved long-term.

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Comparison:

we can see that Compound’s TVL has been stagnant while Aave’s has steadily risen and new competitors such as Morpho and Fluid have grown substantially. This trend is clearer when isolating for growth rate.

defi_lending_tvl_growth
defi_lending_tvl_growth711×511 58.3 KB

In a 10 month span where Fluid’s TVL rose nearly 3x, Morpho’s more than doubled and Aave’s rose 75%, Compound’s TVL growth has been a modest 10%.

https://www.comp.xyz/t/platonia-product-research-service-provider-proposal

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39

Welcome back.
Fluid added $750MM TVL … Growth Program added $750MM TVL.

To compete with AAVE we require higher Collateral Factors you can read here: Collateral Factors: How to Win the Lending Race

To compete with Morpho we need isolated markets which Compound is building here:

To increase token utility we need to run a DeFi Ops program and built APR strategies and vaults for the token like StakedCOMP, Avantgarde Treasury growth strategy, CompEverywhere,

We have a plan to increase the protocol by 1-2 Billion.

  1. Dev tooling: for faster processes on launching Chains, Markets, Assets.
  2. Competitive Rates: Higher Loan-to-value/Collateral Factors
  3. DeFi OPs: to bring more utility to COMP token, StakedCOMP, COMP Everywhere, CarryTrade and Buyback
  4. Isolated markets: to allow for distributed curation and simply launches

These are the 4 things that need to be pushed forward to compete in current landscape and table stakes.

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40

I am voting Against the 2025 Compound Growth Program V3 proposal at this stage due to a few concerns that I believe need further consideration. The requested $7.1 million USD feels quite significant given the current market conditions and the uncertainty around the return on investment.

We would also prefer a payment structure that ties funding to defined milestones or goals. This ensures that funds are only released once specific deliverables are met, fostering accountability and a more results-oriented approach. We feel that any initial funding should be tied to milestones to help ensure the responsible use of resources. Moreover, for larger contracts, we would suggest considering a competitive bidding process to ensure fairness and get the best value.

Given the thoughtful feedback already shared, we believe that with revisions, this proposal could be more aligned with the community’s expectations. We look forward to seeing an updated version that addresses these concerns.

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thanks - in my experience indemnification agreements always depend on the specific terms. i haven’t reviewed them all, but I don’t think the one included for AG makes sense given it will be custodying and disbursing funds on behalf of the DAO

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