Compound <> Morpho <> Polygon Collaboration

Proposals
53

Disclaimer Missing

Worth to note that Morpho is direct competitor to Compound Finance. I beleive it’s important to mention a disclaimer to people who don’t know that:

  1. Robert Leshner (co-Founder & ex-CEO at Compound Labs) and Tarun Chitra (Founder & CEO at Gauntlet) co-founded VC called Robot Ventures

  2. Robot Ventures invested in Morpho on a Strategic Round

  3. Gauntlet become one of the main Curators on Morpho in February 2024, just after they canceled their annual support contract with AAVE prematurely.

  4. Robert Leshner delegated 216,455.81 COMP to Gauntlet during last 2 months.

  5. Gauntlet has total 356.52K COMP voting power which is around 90% of the quorum. It’s spreads accross 2 wallets: 0x683a4f9915d6216f73d6df50151725036bd26c02, 0x7B3c54e17d618CC94daDFe7671c1e2F50C4Ecc33

  6. Gauntlet might receive service fees from Morpho Labs.

Unfortunately, OpenZeppelin wasn’t able to identify those threats.

Potential long-term risks

  1. Compound will become front-end for Morpho.

  2. Gauntlet will launch more Morpho-based markets on Compound.

  3. Compound will invest Treasury funds to drive user growth into Morpho markets on Compound front-end, while Morpho investing zero.

  4. Gauntlet will shift it’s focus from native Compound to Morpho markets.

  5. Compound users will move funds to Morpho markets since it has more support and incentives.

  6. Morpho will switch fees from 0% to 25% or less.

Questions

Fees

What’s the guarantee that 25% fee switch for Morpho will never be activated?

Mechanism Improvements

Why those mechanism improvements were never brought to the table to improve Compound Finance protocol first?

Other questions

  1. Why Gauntlet wants to work for free to service this market? Why Gauntlet doesn’t work for free for the current Compound markets? Why Gauntlet doesn’t want to work for performance fee for Compound, but dumping millions of incentives to unprofitable Compound markets for years?

  2. What’s the jusdification for Compound to provide $1.5M to Morpho and why it’s single-sided? Morpho is able to switch their fees to 25% anytime.

  3. Can Gauntlet provide a statistics about spent COMP on incentives and Gauntlet service fees versus Compound generated fees for the last 24 months?

Combining all points, there is a big chance that this proposal is a first step of coordinated vampire attack. I suggest Gauntlet to abstain from voting for this initiative because of confilcts of interest, and other delegates take points above into account.

As Marc Zeller said:

comp needs to fire gauntlet that is currently pillaging the COMP treasury to subsidy their own competitor growth if they want to survive.

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