Authors: Compound Governance Working Group (CGWG)
The first delegate race successfully delegated 300,000 COMP from the treasury to nine active participants, resulting in a significant increase in governance engagement and voting turnout across Compound DAO. Over 85% of delegated tokens were consistently used in votes, and proposal quorum rates improved dramatically, with 97% of 145 proposals meeting quorum. However, participation, indicated by quorum margin, began to decline in mid-2025 following the revocation of a major COMP holder’s delegations, revealing the need for an additional delegate race to maintain secure governance operations. Cycle 2 of the delegate race seeks to renew and expand delegations under stricter participation and transparency standards, allocating 250,000 COMP to eligible, active delegates. Through this next phase, Compound aims to reinforce delegate reliability, maintain quorum stability, and sustain an active, resilient governance ecosystem.
Delegate Race Cycle 1: Recap & Impact
The first delegate race was run in August 2024 as an open application process coordinated by the CGWG. Delegates who applied were scored on criteria like onchain voting activity, proposal contributions, and community involvement. From 18 applicants, 9 delegates were selected to receive a share of COMP voting power. In total, 300,000 COMP was delegated from the community treasury in that round, with a maximum of 50,000 COMP per delegate, capped such that no delegate would exceed 80,000 COMP in total voting power. The selected delegates ranged from independent community members to organizations, all of whom had demonstrated commitment to Compound governance.
The results of Cycle 1 were for the most part encouraging. By delegating dormant COMP from the treasury to these active participants, Compound immediately saw a notable uptick in governance engagement. 6 out of 8 chosen delegates maintained an onchain voting participation above ~80% over 13 months, from September 2024 - October 2025.
A couple of delegates did see their participation dip around or below the 80% mark after extended months, underscoring the need for ongoing accountability as the program continues. Given these insights, the community is now poised to launch Cycle 2 of the delegate race.
Figure 1: Participation Rates from Cycle 1 of Delegate Race
The weighted average participation rate among the first cycle’s participants was 256,945.47 COMP (Total = Σ [Participation Rate × COMP Allocation]). This implies that roughly 85.6% (256,945 / 300,000) of all delegated tokens were consistently used in votes over the 13-month period. This is overall a strong outcome indicating that most delegates reliably participated in governance rather than leaving their delegated COMP idle.
Since the first treasury delegations went live in September 2024, less than 3% of Compound proposals have failed to reach quorum, whereas about 8% of proposals in the prior year had failed due to lack of quorum.
| Quorum Summary Statistics | Value |
|---|---|
| Total Proposals | 145 |
| Met Quorum (≥400K) | 141 |
| Below Quorum (<400K) | 4 |
| % Meeting Quorum | 97.24% |
| Avg Quorum Margin | 70.27% |
| Max Margin (highest) | 350.79% |
| Min Margin (lowest) | -14.00% |
Figure 2: Quorum Statistics Between Sep 24’ - Oct 25’
This is a strong indicator that boosting reliable delegates’ voting power had the intended effect of meeting quorum consistently and preventing malicious governance proposals. The average voting turnout on proposals also increased, rising by 32% from 508k COMP to 668k COMP compared to the first half of 2024, prior to the delegate race.
Figure 3: Governance Activity by Month
Additionally, the community has been considering and voting on more proposals per month than previous years, at an average of 10 per month, up from an average of 5 per month in prior years. This gradual increase in proposals suggests a reinvigorated DAO where improvements and changes are being actively pursued and passed.
Figure 4: Quorum Margin by Month
Over the past year, Compound DAO’s quorum margin, defined as the percentage of votes cast above or below the 400,000 COMP threshold, has shown a steady state of around 70%, outside of decreases due to seasonality. However, median quorum margin declined significantly in July and August of this year, bottoming out at 22%. This erosion was primarily driven by the revocation of voting power from a major COMP holder, which reduced the volume of consistent large-scale votes that had historically buoyed quorum levels. While September 2025 appears to show a rebound at 52%, this is an outlier and should not be interpreted as a reversal of the trend. The temporary boost in voting came from a short-term influx of support from atypical voters, including the Compound Foundation and other passive wallets that do not regularly participate. Excluding this anomaly, governance has become more vulnerable to falling short of quorum, emphasizing the urgency of reinforcing reliable delegate participation.
Looking Ahead: Delegate Race Cycle 2
The CGWG is proposing a second round of treasury delegations to further boost governance activity, refine the delegate program, and incorporate lessons learned from Cycle 1. This second iteration will expand the delegate slate with new, active members under updated terms to ensure accountability. The ultimate goal is to increase the active voting power in the DAO, encourage even greater participation, and ensure Compound’s governance remains robust and resilient. Below we outline the key parameters and criteria for Cycle 2, with the crux of the application hinging on participation itself:
Total Delegation Pool: Allocate 250,000 COMP from the comptroller for delegation in this cycle. This amount will be distributed across the selected delegates. Each chosen delegate can receive up to 40,000 COMP in additional voting power but not exceed a total of 65,000 COMP in voting power per entity, including any existing delegated COMP from the treasury or alternative sources. This cap, proportionally adjusted based on the reduction of the total delegation pool from 300k to 250k, as per the previous delegate race, prevents over-concentration of voting power while still significantly empowering each delegate.
Figure 5: Delegation Pool
Selection Process: For Cycle 2, similar to the last cycle, the delegate selection process will be based on a preset quantitative measure, namely participation rate between September 2024 - October 2025. Only entities that have maintained at least a 20 percent participation rate in this period will be eligible to apply for treasury delegation. Furthermore, an entity’s last vote must have occurred in 2025. This cutoff ensures that candidates have demonstrated recent, verifiable engagement in Compound governance, effectively filtering out dormant or inactive addresses. The eligible pool includes all participants from the Cycle 1 dataset who meet these thresholds.
Each qualifying delegate will be invited to submit a short application on the forum, including their wallet address, delegate profile, personal statement, and acknowledgment of the Code of Conduct. From this pool, the Compound Foundation in coordination with the CGWG will jointly conduct a brief review of each applicant to assess their understanding of protocol governance, judgment, and alignment with Compound’s mission. From this final list, the applicants will then be ranked on a predetermined rank (see below) based on voting participation rate, and the COMP will be distributed in a waterfall until the total COMP is allocated. This recipients list will then proceed to an onchain governance vote for formal ratification and execution of the new delegations. Below is a list of all the entities that are able to apply, granted they have less than 65k COMP in voting power.
Figure 6: List of Eligible Candidates
By moving to a participation-based eligibility standard and incorporating qualitative evaluation, Compound DAO strengthens the link between demonstrated reliability and delegated voting power. This is also intended to include new up-and-coming community members who have been voting frequently, even with lower existing voting power.
Delegate Commitments & Application: Each delegate nominated by CGWG will be required to formally accept and present themselves to the community before receiving a delegation. Specifically, each recommended delegate must post a “personal statement” comment in the Cycle 2 forum thread announcing this program. In this statement, the delegate should include (a formal application post will be put forward shortly):
- Their delegate name and voting wallet address
- A link to their delegate platform profile on the Compound forum
- Link to their Tally voting history
- A brief (3-4 sentences) personal statement about their involvement and goals as a Compound delegate
- An explicit acknowledgement of and agreement to abide by the Compound Governance Code of Conduct
Even delegates who were part of the initial group in Cycle 1 must submit a fresh statement for Cycle 2 if they’d like to receive more delegation. This ensures a transparent, level playing field, consolidating all active delegates, new and returning, under the same process and reaffirming their commitment to the community’s standards.
Accountability and Participation Requirements: To maintain an active delegate base, Cycle 2 will enforce stricter ongoing participation criteria, applied to Cycle 1 delegates as well. Each delegate receiving a treasury delegation must maintain at least an 80% onchain vote participation rate on a biannually basis. This will be calculated by the CGWG. If a delegate’s participation falls below 80% in a 6-month period, their voting power will be subject to revocation via an onchain vote and switched over to another active delegate.
Unified Terms for New and Existing Delegates: The updated delegation terms will apply across the board. All delegates from Cycle 1 who continue in Cycle 2, as well as the new delegates onboarded, will be subject to the same participation requirement (80% biannually) and accountability mechanisms. By standardizing these expectations, we ensure fairness and reinforce a culture of active governance. If any current treasury-delegated delegates cannot meet the new standard, their prior delegation will be revoked and that COMP will return to the allocation pool for redistribution under this proposal’s framework.
Revocation and Reallocation: The CGWG will institute a biannual review process to ensure accountability and sustained participation among treasury delegates. Every six months, each delegate’s onchain voting participation rate will be reviewed to verify that they remain active and engaged in governance. If a delegate’s participation rate falls below 80% during a review period, their delegated voting power will be subject to revocation. In such cases, the CGWG will initiate a week-long application process, structured similarly to the current one, to identify a replacement delegate(s). This process will be limited to a preset list of eligible applicants who have maintained an average participation rate above 80% over the preceding six months. The delegates from this list with the highest voting participation rate will receive the reallocated COMP delegation, following the waterfall method used in this present proposal. By establishing a recurring cycle of review and renewal, this system ensures that treasury delegations remain in the hands of the DAO’s most active and reliable contributors.
Technical Implementation: The mechanism for delegating tokens will remain the same as in Cycle 1. We will utilize the Franchiser contract system, which has been previously audited and used for the initial race, to assign voting power to each selected delegate. In Cycle 1, a Factory Factory contract was deployed and then individual Franchiser contracts were created for each delegate, each holding the delegated COMP voting rights on behalf of the DAO. We will follow the same approach for Cycle 2: an onchain governance proposal will deploy any new required contracts and delegate the specified COMP amounts to each delegate’s address. Importantly, the DAO retains ownership of these contracts and can revoke or reassign the delegation at any time via a governance vote. This means the treasury’s funds remain secure and recallable. If a delegate violates the Code of Conduct or fails the participation criterion, the community can seamlessly reclaim those votes. The delegated COMP is purely for onchain voting power and cannot be transferred or used by delegates for any other purpose.
Next Steps
Increasing the number of engaged, accountable delegates is crucial for Compound’s defense against governance risks. The first delegate race succeeded in activating a core group of voters and raising participation to healthy levels. Cycle 2 will build on that foundation by refreshing and expanding the delegate set under stronger accountability measures. With 250k COMP to be newly deployed, we expect this initiative to further boost voter turnout, quorum reliability, and the overall quality of governance decisions in the coming months.
We invite the community to provide feedback on the above plan. The CGWG will incorporate any input and finalize the list of recommended delegates for Cycle 2. Upon community consensus, a proposal will be put onchain to execute the new delegations as described. By approving this plan, Compound DAO will reaffirm its commitment to active, high-integrity governance.
After 7 days of letting this proposal gather feedback on the forum, and granted that no major opposition surfaces, the CGWG will indicate on the forum where/when entities can begin submitting their applications.