Proposal: Selecting Aragon as the governance platform for the future of the Compound DAO
Introduction
This proposal outlines Aragon’s offer to become the dedicated governance service provider for Compound DAO, improving its governance capabilities and flexibility without requiring any complex migration. Aragon aims to extend the existing Governor DAO setup with additional powerful features and decision-making processes that Compound needs to operate effectively and efficiently.
Current Governance Challenges at Compound
Compound’s governance model, relying exclusively on token-based referendums, consistently faces challenges in reaching quorum, especially for routine or operational decisions. Compound governance has seen multiple instances where proposals failed or nearly failed due to low voter participation, underscoring an urgent need for a more efficient governance solution that leverages tools like specialized bodies and veto models to make sure Compound remains safe and efficient. Low voting participation also opens the door to malicious proposals, and last minute mobilizations can’t be the long term defensive strategy of this DAO.
As of April 2023, only about 1.8% of COMP supply participated in votes, which is less than half of the 4% quorum requirement. 2024 has also seen multiple quorum failures. Many technical or risk parameter changes, often proposed by partners like @Gauntlet, saw low engagement. These proposals didn’t fail due to active opposition, but rather due to a lack of participation. This trend has only strengthened in the last few years. Further analysis can be found in the recent research by @AranaDigital, @PGov and @StableLab.
In addition, this proposal represents major cost savings for the DAO, as several stakeholders have expressed concern with the continued high maintenance costs of running the Compound DAO. After the first year, the DAO could operate free of cost on Aragon, removing vendor lock-in and dependencies on closed source infrastructure.
Aragon’s Modular Governance Solution
Aragon directly addresses these governance issues thanks to its highly modular governance architecture. With specialized tools such as configurable quorums, multisigs that can access specific DAO contract functions, and veto capabilities, Compound can precisely tailor governance processes to specific needs. Importantly, prominent and critical Safe multisigs already in use at Compound can easily integrate into these governance flows, just as the current Governor DAO.
Illustrative examples of potential governance processes include:
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Grants and Operational Decisions: Implement a governance track limited exclusively to distributing treasury funds, significantly improving efficiency.
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Treasury Management: Create a governance track pairing a multisig with a tokenholder veto mechanism, balancing rapid decision-making with robust oversight.
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Emergency Response Track: Establish a governance flow for rapid multisig decisions, subject to tokenholder veto, enabling the DAO to swiftly address urgent issues.
These are suggestions of the types of processes Compound can implement to significantly improve its governance efficiency and responsiveness. Crucially, these enhancements can be integrated without substantial disruption or complicated migration.
Seamless Integration and Compatibility
Aragon integrates effortlessly with Compound’s existing Governor DAO setup and token standard, enabling Compound to continue using its familiar one-token-one-vote referendum model unchanged. New governance tracks can be incrementally introduced, ensuring continuity of existing operations. This integration does not require extensive contract changes, complex migrations, or significant disruptions, allowing the DAO to evolve its governance at its own pace. Aragon will fully support and hand-hold the DAO through the process.
Staking Model Compatibility and Future Proofing
Aragon’s modular architecture ensures compatibility with any staking solution chosen through Compound’s ongoing Staking RFP. Any proposal that creates a vendor lock-in that could threaten the integrity of the ongoing Staking RFP represents considerable risk for the DAO.
Aragon’s staking models are already extensively battle-tested, securing millions of dollars in total value across multiple protocols, ensuring robust, secure, and straightforward integration from day one, but our team also has experience integrating different staking solutions.
Security and Reliability
Aragon maintains an impeccable security record, with its smart contracts reliably securing billions of dollars across Ethereum without any security incidents. Aragon will maintain dedicated communication channels to provide ongoing specialized support and assistance.
| Scope of Work | Description |
|---|---|
| Governance Infrastructure Setup | Integration of existing Compound Governor DAO into Aragon’s modular governance framework and UI; configuration of new specialized governance tracks, migration of permissions. |
| Custom Governance Tracks | Advice and development of tailored governance processes (e.g., Grants Distribution, Treasury Management, Emergency Response); integration of existing Safe multisigs. |
| Custom Branding and Interface | Customized frontend with Compound-specific branding for a familiar stakeholder experience; tailored UX improvements for governance interactions. |
| Dedicated Advisory and Technical Support | Continuous advisory for governance process refinement; direct access to Aragon’s smart contract engineering team for security assurance and implementation. |
| Integration and Compatibility | Compatibility assurance with Compound’s staking solution from the ongoing RFP; comprehensive documentation and integration support. |
Pricing
The proposed cost for this governance service is $5,000 per month ($60,000 annually), which includes specialized support, advisory, assistance in creating and maintaining governance infrastructure, creating new governance processes, and oversight by Aragon’s dedicated smart contract engineering team. Any custom logic required now and in the future, including the staking RFP are not included but we will ensure the most competitive rate. This proposal does not cover the currently ongoing Comp Staker discussion.
Should Compound DAO decide after the initial year that the governance enhancements are fully integrated and specialized support from Aragon is no longer necessary, Compound DAO is free to continue using Aragon’s infrastructure at no additional cost, as all Aragon-developed governance tools are open source and freely available.
Aragon will not require a renewal proposal or additional fees and will continue to support the Compound DAO for free, additional custom work would be part of a different agreement.
We are open to receiving payment in COMP tokens. Compared to the other proposal currently offered, this one provides a more predictable pricing model that presents better long term value to the DAO.
| Proposal | Year 1 | Year 2 | Year 3 | Total |
|---|---|---|---|---|
| Tally | $150,000 | $150,000 | $150,000 | $450,000 |
| Aragon | $60,000 | $0 | $0 | $60,000 |
Conclusion
This proposal was recommended to be put forth by several stakeholders as there was no RFP process in place to select a provider. We are very happy to work with delegates through a fair and transparent RFP process to make sure the Compound DAO selects the best option.
Compound DAO stands at a crucial point where improving governance flexibility is essential to avoid recurring quorum issues and streamline decision-making. By adopting Aragon’s governance stack, Compound DAO will gain:
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Immediate flexibility through specialized governance tracks
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Enhanced security guarantees and dedicated support
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Compatibility with any future staking solution
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Significant operational cost savings without burdensome integration work
Aragon is ready today to provide Compound DAO with the governance tools necessary to confidently and securely scale into the future, ensuring governance efficiency, responsiveness, and long-term operational effectiveness. The migration is easy, we will support it every step of the way, and it offers certainty to the DAO about future governance spending.
All of the above is flexible and we are open to further collaboration and discussions.
UI Snippets
As the delegates of the Compound DAO might not be as familiar with the Aragon user interface, I’ve taken the liberty to add a few snippets to showcase our product:
