Renewing the Compound Governance Working Group (CGWG) 2026

Proposals
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Co-authors: @AranaDigital & @PGov

Overview

Since its establishment in mid-2024, the Compound Governance Working Group (CGWG) has played an important role in shaping the evolution of Compound governance. Initially, the CGWG concentrated on strengthening the protocol’s governance framework, with a focus on increasing both the quality and quantity of delegate participation. This early work aimed to make governance more robust, inclusive, and effective.

Over time, the CGWG has expanded its mandate beyond immediate governance improvements to also address the long-term sustainability of the Compound DAO. This now includes organizing Delegate Races 1 and 2 to delegate voting power to trusted entities, stabilizing participation and quorum; safeguarding governance through work on the Community multisig, including signer rotations and extending the Proposal Guardian; and coordinating the delegation of idle COMP from sources like the Avantgarde Avatar Safe to ensure voting power is fully mobilized. The group also ran multiple RFP processes, for the Security Service Provider team, Voting Service Provider, and OEV setup, bringing structure and neutrality to vendor selection. These programs have been conducted directly in coordination with the Compound Foundation, allowing for cost savings and increased revenue streams.

The CGWG also helps manage multisigs such as the Immunefi Bug Bounty, Compound Blue Incentives, and the Scroll Airdrop Safes. Stakeholder coordination has also become one of the team’s priorities, as the CGWG hosts bi-weekly community calls, moderates the forums, and provides research for governance-related items. Collectively, these contributions ensure both daily governance reliability and long-term protocol resilience.

Governance Activity

The CGWG’s goal remains aligned with continuously observing data around governance health. A top priority of our’s is achieving steady participation and reliably meeting quorum. Since the CGWG’s establishment (Vote 254 in the charts), participation has climbed, and the sporadic nature of voter turnout fell, due to Delegate Race 1 and other coordination efforts led by the team. Despite a brief mid-period softening, on average, participation remains significantly above pre-CGWG levels.

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This trend is echoed in “total COMP voted per proposal,” which has increased on average. We closely watched a modest downtick earlier this year, which has been successfully reversed by recent initiatives to help invert this short-term decline. A steady 3-month decline in quorum margin, for example, was a key reason for running the second Delegate Race, which passed in late November 2025.

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We’ve also seen a steady rise in unique governance participants. This growth aligns with Compound DAO’s evolution: as mandates have shifted and scopes have clarified, the roster of tasked service providers has changed accordingly, reinforcing broader participation. The Delegate Races have also granted voting power to various active yet underrepresented teams.

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As noted previously, persistent participation is critical to Compound’s resilience. After a governance attack amid declining turnout in July 2024, the working group’s launch helped reverse the trend, with participation rebounding by October 2024. But any renewed slowdown could again create conditions for governance attacks. Therefore, a team attuned with governance is vital for maintaining seamless operations and coordination at the DAO-level. Relative to 2024, the CGWG is also more robustly enabled to achieve its objectives with the assistance of the SSP team and Foundation.

Delegate Race 2 & Delegate Coordination

Compound’s Delegate Race 2 has successfully allocated 310,000 COMP from the comptroller for delegation in this cycle. The recipients were selected by the CGWG and the Compound Foundation following a review process that focused primarily on voting participation, as the core goal of this initiative is to help the protocol reach quorum more reliably.

Woof has also been included due to its broad, high-impact contributions to the protocol and its established on-chain voting history.

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When combined with the 300,000 COMP allocated in Delegate Race 1, Compound DAO now has a total of 610,000 COMP actively delegated to bolster governance, supporting the passage of constructive proposals and defending against potentially malicious ones.

Relative to the first Delegate Race, the CGWG has instituted more strict participation requirements from beneficiaries of this program, like the voting power revocation clause. Since a significant portion of the DAO’s COMP is now locked in Franchisers for delegation purposes, it is the responsibility of the CGWG to ensure the associated voting power is properly utilized to uphold governance procedures. The increased number of treasury delegation participants also introduced more coordination overhead, which the CGWG is tasked with facilitating.

Governance Security

In addition to encouraging governance activity, safeguarding governance is a top goal. Our continued support for critical functions, particularly with the Community multisig, include extending the Proposal Guardian, rotating active signers, and renewing the runway aligned with Compound DAO’s vision. These components in aggregate are crucial to maintaining DAO-wide resilience.

The team is also available at all times to assist community members and DAO-associated teams with proposal operations. We assist in coordinating votes at critical junctures to ensure the protocol and governance aren’t stunted at any point. For instance, a recent unprecedented drop in Comptroller funds led the Foundation to assist protocol operations by fronting ~$1M COMP of their own operating budget. The CGWG aided in a quick reimbursement proposal to ensure that Foundation initiatives would not stall.

To ensure effective mobilization of all voting power in times of need, the team also assisted in the delegation of idle COMP from various sources to the Foundation—this includes delegation from the Immunefi Bug Bounty multisig and the Avantgarde Avatar Safe.

Additional Governance Operations

Hosting RFP Process:

Some notable initiatives in 2025 were the group’s role in supporting the Request for Proposals (RFP) process for a Security Service Provider (SSP) team, Voting Service Provider, and Oracle Extractable Value (OEV) setup. A successful Snapshot proposal formalized the CGWG’s mandate to run transparent, neutral RFPs under community oversight, enabling apples-to-apples comparisons between vendors, better selection decisions, and less governance fatigue, while remaining flexible so RFPs are used only where they add real value.

These developments, driven by feedback from the community, reflected the CGWG’s commitment not only to responsive governance but also to building resilient structures to ensure DAO security and growth. The succession of these RFPs between Q2-Q3 2025 helped alleviate some of the discord present prior to a professionalized system for vendor selection. Topics like OEV, for example, had been up in the air for over a year, without any direct implementation. Timing wise, the CGWG’s foray into RFPs corresponded with the launch of the Compound Foundation, allowing both teams to cooperate on onboarding vendors, reducing bloated costs, and introducing new revenue streams:

  • The SSP RFP has cut annual security costs by an approximate 50%.
  • OEV adoption through SVR, since going live in October, has led to the inflow of over 125 ETH.
  • A formalized partnership with Tally has sustained voting infrastructure upkeep, and potentially, the introduction of increased operational efficiencies through optimistic governance.

Foundation-aligned Strategy:

We will continue to work with the Compound Foundation on new strategic initiatives. These will include efforts to expand the reach of Compound governance, align protocol development with DAO needs, and ensure community priorities are reflected in Foundation-led programs. It is vital that governance remains effective and operational as a positive backdrop for the DAO, as the Foundation seeks new partnership and growth opportunities. In practice, this can involve:

  • Providing operational support for new Foundation-backed pilots where DAO input or oversight is required, ensuring smoother execution and a clear line between governance and implementation. For example, during RFPs, the Foundation may take on vendor negotiations, while the CGWG coordinates proposal framework, Snapshot/onchain votes, and educates delegates.
  • Jointly shaping governance initiatives that improve the DAO’s operational maturity, such as frameworks for delegate accountability, transparency standards, or incentive alignment.
  • Coordinating on protocol growth initiatives and product expansion, along with integrations that strengthen Compound’s position in the broader DeFi ecosystem.
  • Acting as a feedback bridge between the Foundation and the DAO, ensuring community voices inform Foundation strategy while maintaining transparency and independence.

Compound Community Multisig:

A representative (PGov) from the CGWG will take on the role of operations manager throughout this upcoming year for no extra cost, reducing the overall budget of the multisig and helping coordinate between the security council and DAO. Throughout this last year, we helped facilitate a formalizing of the multisig, rotated initiative signers, and helped establish a runway budget comparable to industry standards.

Compound MetaGov:

It is in the DAO’s best interest to take a more active role in the governance of other chains and projects. Empowering CGWG to engage when necessary is a pragmatic way to maximize collaboration and influence across DAOs. In some cases, voting power can also strengthen Compound’s position in pursuing grants. As a current example, the CGWG supports Compound MetaGov efforts for Optimism and Scroll.

In addition, the CGWG will help surface relevant grant opportunities and strategic developments across the broader DeFi ecosystem that may be beneficial to Compound. This includes sharing periodic insights on initiatives, funding programs, and governance or protocol developments from other major lending protocols, where such information may inform Compound’s long-term strategy. In the event other ecosystems propose grant programs that Compound is able to apply to, for example on Optimism or Arbitrum, the CGWG will pursue such opportunities when applicable.

Funding, Escrowing, & Distributing Capital for DAO Programs:

For new or unestablished teams seeking funding, routing approved funds through a trusted intermediary (e.g., a CGWG-administered multisig) enables periodic or milestone-based disbursements, adding accountability and avoiding excess onchain votes. The same model applies to payroll, where the CGWG can escrow the pre-approved program budget upfront and distribute as needed.

Some existing examples of where the CGWG helps as a multisig & accountability singer:

Looking ahead, if the DAO launches additional working groups or delegate/contributor incentives, CGWG will act as the operational team to verify and execute payments, if the Streamer setup for the program is not ideal.

Community Management:

Since September, the CGWG started hosting bi-weekly community calls, taking on more of a community management role. These were previously conducted by the Woof team. Going forward, the CGWG will remain responsible for coordinating speakers, service providers, grantees, and other community members on public calls, all of which are summarized and recorded in this forum thread.

We also finalized a Code of Conduct, helping guide Compound governance toward greater professionalism, transparency, and alignment among all participants. In the event of discord on the forum, the CGWG will step in as a moderator, assisting with any conflict resolution, within a 6-hour weekday response time.

Case Study and Research:

Members of the CGWG have extensive experience leading key case studies and research initiatives across multiple DAOs. For example, within Uniswap DAO, they have conducted research on topics such as treasury mobilization and delegate rewards.

As Compound DAO explores various upcoming changes, from entering new ecosystems to potential adjustments to its tokenomics, the CGWG will coordinate with both the Foundation and a range of stakeholders to deliver actionable insights and case studies that can be used to further grow and strengthen the Compound ecosystem.

Renewal Details

The CGWG will consist of PGov & Arana Digital going forward. We recently concluded our first full year of operations in December. Based on feedback from the Foundation, the CGWG has revised its compensation structure to reduce fixed costs, while introducing explicit performance-based accountability.

Base Compensation:

  • $19,000 USDC per month for 14 months
  • Total base budget: $266,000 USDC
  • Term: December 1, 2025 through February 1, 2027

This represents an 18.5% reduction from the prior base compensation level of approximately $23,300 per month, while sustaining increased operational scope and responsibilities outlined in this proposal. Funds for months without existing compensation will be transferred as a lump sum to the CGWG multisig, with all remaining funds streamed over time through February 1, 2027.

Performance-Based Compensation (KPI Pool)

  • $64,000 USDC total performance bonus pool
  • Held in a shared multisig between the Compound Foundation and CGWG

The Foundation has requested a set of KPIs including maintaining quorum reliability such that at least 95% of standard on-chain proposals successfully reach quorum; ensuring sustained delegate engagement through bi-yearly Delegate Race rebalances, with recipients maintaining at least 80% weighted voting participation; meeting strict emergency governance service-level expectations, defined as zero missed response windows for time-sensitive governance events within a 4-6 hour window; and preserving governance security by ensuring that no malicious governance attempts are executed successfully. The performance-based compensation pool is contingent on the CGWG meeting this defined set of governance and operational KPIs over the term, coordinating closely with the Foundation to unlock this budget only if they are met. Funds will be held in a shared multisig with the Foundation and quarterly reviews will be conducted.

Timeline

We welcome any feedback on the forums. Above all, we will continuously look for new ideas and suggestions on how we can best steward governance at Compound. We will seek to propose an onchain vote after a week of RFC.

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First off Thank you to the CGWG contributors for the work delivered to date, governance coordination is often hard and thankless. I aim for this post not be critique of individuals, but a double spend issue and budgetary discipline:

I believe the DAO should pay once for each responsibility, with one clear owner, one set of deliverables, and one accountability surface.

Based on the original Foundation mandate, the Foundation’s own Inaugural Transparency Report, and the CGWG 2026 renewal request, there is now material overlap in responsibilities that amounts to “double spend” by the DAO.

  1. Governance stabilization + resilience is already within the Foundation’s claimed scope
    The Foundation’s transparency report explicitly frames its work as improving “governance quality, participation, and resilience” and describes extensive delegate coordination

  2. Community engagement + communications is overlapping
    The Foundation’s creation mandate includes increasing participation in governance by implementing best practices and “enhancing community engagement and communications.”

  3. Vendor selection, RFPs, and oversight are overlapping The Foundation reports it issued/evaluated RFPs across security/risk/infrastructure and moved toward structured security oversight.
    CGWG’s renewal also lists running RFP processes.

  4. CGWG is requesting ongoing compensation, The Foundation already has an approved, material operating budget and disbursement schedule through 2026.

Funding both while both claim “stewardship” and “stabilization” is double spend. The DAO already paid a substantial amount to the Foundation for the same responsibility, should not the Foundation engage CGWG and pay from their budget?

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Hi Bryan, thanks for your feedback, and we agree that budgetary discipline is important. Governance, however, isn’t a siloed bucket and inherently requires collaboration between multiple teams. Initiatives like an important RFP, for example, cannot be arbitrarily conducted in a vacuum. There are moving pieces, including vendor coordination, RFP design/research, educating delegates, voting management, etc. And this principle extends to the other scopes of work mentioned as well. To make the ecosystem a cohesive unit, the CGWG and the Foundation operate in concert when required. This allows for execution/coordination to coincide with overarching strategy and prevents unnecessary bottlenecks.

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Thank you for the reply and confirmation.

"the CGWG and the Foundation operate in concert " clearly spells out that there are overlapping scope and unclear accountability.

When The DAO pays twice for one job, the only thing scaling are the invoices.

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I wonder why with all the legal issues and the overspending they haven’t thought about bringing growcompound back for the mean time until commutations are figured out. Maybe if the token price could increase with some marketing and presence they wouldn’t have to worry about budgeting and more money instead of using the budget already paid out

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I believe Compound Governance Working Group has played a pivotal role within the past 12 months - from the point when proposals were struggling from quorum to current delegate numbers. The CGWG members have demonstrated continous effort -

In my personal capacity, and my capacity as a humble delegate, I believe CGWG deserves extension and continuation, pending it reforms it working principles and scope.

There are some questions that CGWG that put its role in questions regarding conflict of interest, unethical behavior, centralization of power, blurrring of lines that puts CGWG itself in a position of centralization.

I have listed my concerns with current workings of CGWG in details here among my concerns of a wider DAO centralization within Compound,

I believe there is evidence substantial enough to question the centralizing tendencies of CGWG members, conflict of interest of the members, direct and indirect financial dependency on Compound Foundation.

One of the previous members of CGWG silently shifted from CGWG to Compound foundation, without announcing their departure and timing from the group. Opening a possibility of the member leaving their DAO appointed position and role, in favor of a financial position offered by the Compound Foundation. Can the services and neutrality of CGWG members be purchased? there is an example now, where it seems to be possible. Conversely, this new proposal does. not even hint at the name of the old CGWG member and their shift.

For me, it does not make sense for CGWG to continue its operations unless it can define and out line itself and its member’s financial interests separately from Foundation, as well as its operational and existential independence from Compound Foundation. CGWG needs to clearly define its boundaries, ideal behavior and conflicts of interest, to generate confidence enough to work independently

I would have called my concerns nitpicking, but with the points listed in my posts, I would urge the CGWG members to cancel the proposal and define their scope, limitations, tenure of members, disclosure of conflict of interest of members, motives for excellence, their own definitions of incompetence, restrictions on taking any other paid positions within the DAO, and disclosure of financial dealings with Compound Foundation proof. Governance group loses its value and motivation if it itself becomes a party/and accomplice to centralization of the DAO and its members centralize various paid positions to themselves.

@PGov and @AranaDigital are both distinguished participants within the DAO space, I believe they are capable enough to understand the depth of my allegations and come true to their image, of first clearing my concerns and giving enough time for corrections instead of pushing proposal when it is certainty that none of the delegates will vote against - none of the delegates have stake to vote against, with majority delegates brought over to Compound by the CGWG.

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I’ve attempted to cut to the heart of these criticisms here: Commentary on Governance Security Measures and Their Critics

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Thank you @cylon I am going through your post and will comment once I have understood it fully,

but in the meanwhile, cutting to the heart of these criticisms defeats the whole point of addressing each of the points that I have raised, each of which may remain un-addressed

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Restraining from cutting to the heart of @cylon 's post, I have instead elaborated and expanded the discussion to allow a healthy DAO wide discussion. Great to see Michael becoming active again, I have listed my additional observations here on the post Commentary on Governance Security Measures and Their Critics - #2 by sharp

Replies to any of the posts are welcome.

As again, I have respect for all the members and believe through dissent and discussion we arrive at conclusions, given all parties have openness to discussion and transparency of their incentives and ultimate interests. Criticisms gain credibility without proper addressing.

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@AranaDigital @PGov regarding my recent allegations of unethical conduct by the members, why should this incident not be treated as a malicious conduct? Given the paid interest for PGov in such a role that would extend till 48 months, there are overarching questions of your independence to Foundation and conflict of interest

Furthermore, failure of the very purpose of CGWG if CGWG members start defending a unilateral action by compound foundation, without dialogue with sufficient time of months in hand

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We’d like to start by emphasizing that the CGWG was established as a governance support mechanism from the get-go, and that remains to be the case. Our core responsibilities include supporting quorum, helping coordinate delegate, facilitating communications, providing research on matters like RFPs, etc.

We reject the allegation that there is some sort of coordinated bribery scheme or unethical effort underway. The DAO made a clear governance decision to select the Foundation as the steward of the protocol. That decision was debated publicly and approved through established governance processes. As members of the CGWG, our role is to facilitate the DAO in the direction that has been communally agreed upon.

The proposals and operational decisions currently being made trace back to that underlying governance determination, where trust was placed in the Foundation. These are actions being taken by a trusted steward, in corroboration with DAO-elected service providers, all of whom have strong track record and public reliability. So this is not a matter of unethical collusion, and the goal is not rent-seeking behavior.

Another decision that the DAO has made, with abundant clarity, is proactive defense against actions that have reasonable cause to impair the state of the protocol and DAO. This principle predates current events and is reflected in prior episodes and public discussions. If you’d like me to be more direct, it means preventing governance capture attempts by entities like Humpy. The community has deemed this entity as a key risk for the effective facilitation of Compound. This is why the community guardian exists in the first place. In the event plausible risks such as high degrees of token accumulation arise, governance must respond with an equal requital. Alpha Growth is of course deeply familiar with this history.

One of the areas that DAO-elected entities had to spend an undue amount of time on during H2 2025 were these security concerns. It was invariably a distraction from building. In fact, right as the previous guardian duration expired in September 2025, a vote to fully disassemble delegate race cycle 1 was pushed. If successful, that would have paved the path for governance attacks akin to that in 2024. This warranted an emergency publication of a 12-month guardian renewal without extended forum deliberation. That vote successfully passed onchain. What happens in September 2026 when the guardian expires again? And what happens in the months leading up to September? And how does that bode for growing the protocol, establishing partnerships, etc?

Putting yourself in our shoes for a moment, if you recognized that the DAO 1) has trusted Foundation as the new steward and 2) are committed to safeguarding Compound against entities who have demonstrated a malicious nature, would you not be inclined to rally the ecosystem around such efforts because they are the most prudent to Compound’s success and sustenance?

If the community believes this outlined stewardship model should change, or that apt defense against the threat of harmful proposals should be recalibrated in some manner, that is within governance’s authority. As a matter of principle, we should approach this with caution as to prevent unwinding much of the existing efforts to stabilize governance. The actions currently being taken with the onchain proposals is respecting the existing will of the DAO.

We remain committed to transparency, accountability, and open dialogue. Strong opinions are part of healthy governance. We are confident that our conduct reflects the standards expected of contributors serving the protocol.

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Compound Governance - Observations, questions and learnings
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Thank you @AranaDigital for the response, the de-lineation of Compound foundation from CGWG and its operational independence is still not clear.

I am aligned, open discussions are a part of healthy democracy. I respect @AranaDigital to be open to discussions

Again there is little chance that my voice will be of any use when there is complete centralisation of the dao, but still in this case, the happenings of Compound will serve as lessons to other DAOs to avoid governance failure. even in this case, Giving incomplete, off-topic answers to serious questions does not suit the reputation of Pgov or Arana.

There is a serious allegation of unethical behaviour, please use more than one sentence to elaborate. The answer contains 1 line of CGWG defence against the allegations, and a whole paragraph of justification of the foundation. Ironically, this behaviour of defending the existence of Compound Foundation instead of addressing allegations of bribery, only stands to deepen any concerns of financial collusion of CGWG members with Comp foundation

None of the allegations that I have listed point by point, none have been addressed. If I was wrong or acting in bad faith, that if my allegations were baseless, any honest delegate would have taken the trouble to address each of the allegations and prove me wrong with ease

Answering here with complete honesty

  1. The DAO has entrusted foundation with Compound stewardship for 18 months. @AranaDigital would you treat Compound Foundation’s stewardship as perpetual?

  2. Aligned, safeguarding Compound is necessary, as I have stated in my previous posts, guardian multisig is needed. Please, however do not ignore my questions relating to the timing, opacity of the guardian multisig @AranaDigital . A proposal was posted to extend guardian multisig for 48 months without any discussion, why are you avoiding this question of Compound Foundation not following norms?

  3. Is Compound foundation free to exercise unchecked authority? Does it excercise rights as a service provider or is it treated as a sovreign entity within the protocol?

I beieve Communicating about the guardian multisig being posted on voting without discussion on forums falls under your scope of communications. Failure to report this, should it be treated as negligence or incompetence? Again within the unclear premise of CGWG members undisclosed financial dealings with the Compound Foundation.

Matters of RFP
I have listed an RFP Research failure of the CGWG, I have still not recieved answer.

Requesting CGWG’s clarification on a hypothetical situation

@AranaDigital @PGov again asking this question to both of the members in their capacity of the Governance stewards within forums, I would appreciate a clear answer to each of the points of this question

If any entity within the DAO (this could be any entity, even AlphaGrowth), would CGWG describle potential safeguards

  1. Attempts Treasury drain : Has been requesting consistent resources from the treasury without demonstrating any publicly available impacts for an on chain protocol
  2. Financial dealings Has opaque financial dealings, furthermore allegations of purchasing delegates and community members
  3. considering the entity’s sole existence is to forward the cause for Compound, has not shown any impact within a sizeable period of time
  4. Governance capture : Posts governance votes without forum discussions
  5. Accused of Slow drain : where if patterns emerge of suspicions of the entity slowly using the Compound treasury to payroll its employees without showing any impact

I would need a clarification from the CGWG members in case such a hypothetical situation arises, it would be even more credible if the next answer is not just 3 paragraphs of defending existence of opaque.