The above statements I made in my prior proposal still hold. At the time of writing, I advocated for our users - who are also token holders - to continue receiving a share of the protocol. Decentralization of ownership matters.
Nope, decentralization matters not. It’s cool story which easy to sell to crowd, but really nothing was done for decentralization. Actually every step so far was in opposite direction. Initial distribution directead most of the tokens to the hands of venture investors and team, with lesser portion to be distributed for a users over 4 years, but, oh well, that distribution was massively concentrated for big capital holders, and now even that going to stop, effectively stealing user portion of tokens and redirecting it into “trreasury” of protocol. Which in turn is largely controlled by those who got
initial distribution, and now they can vote what they going to do with tokens never actually belonged to them. Users on the other hand will have cool story that for their benefit distribution going to improve 
Since most COMP being distributed by the current rewards program is instantly sold off, existing users and token holders are at a great disservice. Their share of the protocol is being diluted for nothing other than farming COMP for profit.
That can’t be further from truth. Share of the protocol for token holder stays exactly same no matter what happens with COMP being farmed. 1 COMP is always 1/10M share of the protocol. Nothing is diluted as COMP is a fixed supply token. As for market
valuation it have literally nothing to do with share of the protocol. It’s just a speculation which matters not in the long run. The only thing protocol ACTUALLY own is reserves, and recursive farming is in fact benefitial to reserves, as it exchange comp tokens, which bear no value, for mostly stable coins in reserves which DO have a value.
However, it’s true that COMP distribution mechanism isn’t that great. It worked somewhat, and users were actually able to get a little bit of it, though scraps.
As for your plan i don’t have a goot feeling about it, if only for a reason that normally you don’t dismantle anything, which works, to build something which might work better in future (or might not). You build something FIRST, and then you transition from old to a new model.
As for COMP tokenomics, as it was first, it obviously wasn’t ideal. First of all initial distribution had not created treasury of protocol, opting to allocate all COMP supply. And treasury is what should be used for bootstrapping new markets.
Bootstrapping is a good idea by itself.
But treasury isn’t the only thing DeFi discovered through it’s existance. Of course, treasury in protocol tokens isn’t really a treasury just like it also isn’t in traditional finance. Aside of having protocol native tokens for some initiatives treasury should mostly hold actual reserve assets, like stable coins, eth, wbtc maybe several other tokens. Compound protocol actually fits well for having that, as it does naturally collect some reserves from it’s pools, which could be managed by protocol instead of just sitting in the pools for kind of nothing.
And another good discovery made by DeFi on the way, that it’s actually great to have protocol-owned liquidity. Not in kind of scammy way ohm forks did, but as a concept. For example, protocol can and should provide deep liquidity for COMP-ETH pairs
on important chains. Like it’s great to pay for that liquidity in protocol tokens like some dao do, but it’s even better when protocol actually owns it itself and instead of paying for liquidity, recieves trading fees, which slowly grow it’s treasury.
All that things are quite well-known by that point:
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Having treasury supply of native tokens (COMP) for incentivize programs
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Having deep treasury reserves, nominated in non-protocol tokens like stable-cons, eth, wbtc, possibly some others.
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Having deep own liquidity of nativetokens pairs on importand DEXes on important chains. At least on eth, maybe some others, depending on presence/planned presence of protocol.
It’s controversal if protocol tokens should be distributed for locking COMP tokens, there is not much value for protocol when someone just holds tokens, especially if at the same time they neither can use it as collateral, nor even vote in governance. It’s a waste in a long run, incentivising liquidity pairs is by far better spending (and even that is debateful,
as if protocol owns deep enough liquidity itself, there is no need to pay for external suppliers of liquidity, as they will come for trading fees anyway)
There might be some benefit in locking tokens for years and recieving weighted voting power for that, but we all know what it creates. CRV is good example. It’s just going to create another Convex. Which might be not bad.
The biggest question is while COMP model could be improved, should it? Do those VCs actually that useful for community to drag them with their bags, or it’s better to dump them and just use the code? Compound works fine as a protocol, price appreciation of COMP token isn’t really needed for anything and even if it plummet to zero pretty much only VC will be hurt, it’s irrelevant for small users, who hold pretty much nothing in vast majority.
That’s the thing: wide distribution of tokens is needed more for major bag holders, rather than for small guys. And yet they not even were able to push airdrop through governance.
It’s scientifically interesting to see what will happen when distribution will stop, but it’s not a big deal. Liquidity for COMP tokens provided by speculators, farming is done by speculators. There is nothing fundamental there, just one traders try to benefit at the expense of other traders. And VC mostly sit on their tokens and only marginally care about price at least mid-term. To have something more solid, Compound should be more of a DAO, which owns value, manages it, and is profitable in growing protocol-owned funds. Then shares in such enterprise will grow naturally.