Proposal 370 Review
OpenZeppelin reviewed Compound Proposal #370, which funds the Governance Working Group (GWG) and a governance grant program for the next 12 months.
The simulated enactment of the proposal executed successfully, transferring 6008.58 COMP tokens to a multisig known to be controlled by the GWG as implied by the proposal description.
Although the proposal lacks an explicit description of the execution steps, the requested funding amount of $280,000 and conversion rate of COMP in USD, 46.6, is included and approximates to the transferred amount in COMP 6008.58369099 ~ 6008.58. However, at the time of proposal, the price of COMP in USD was increasing past $60, significantly higher than the conversion rate in the proposal, 46.6. At the time of this review, the price of COMP in USD is approximately $64 and enactment of the proposal at this price would transfer approximately $384,549 (6008.58 * 64) worth of COMP, exceeding the proposed amount by $104,549 (+37%).
The Aera Vault for Compound Service Providers was proposed and enacted to address this specific risk of token price movement to Compound and its service providers. Additionally, the vault is recommended for service provider payments to mitigate potential price impact of liquidating COMP, enable yield for the DAO, and provide direct recourse on vendor operations.
Following our notice, @PGov has acknowledged the price change in the forum and has committed to return 1688 COMP back to the treasury.