We (the Aragon team) would like to propose an alternative option for Compound that we think would not only solve the low participation issue but also provide a more flexible and battle-tested staking solution. We’d like to thank the @AlphaGrowth team for their time and their feedback on this proposal.
Summary
There are two key responsibilities of governance: protocol changes and capital allocation. Protocol upgrades and other technical proposals are rarely divisive, but require a lot of work to mobilize delegates and tokenholders. This is why we believe that Compound would be better served with optimistic governance, where tokenholders hold a veto rather than an obligation to vote. Chasing dwindling voter participation for support on changing basic parameters is a losing game.
Optimistic Governance Model
Risk Manager Position: A designated risk manager will be authorized to initiate protocol and security upgrades quickly, ensuring Compound’s resilience and rapid response to emerging issues. This risk manager position can be voted on by the DAO over a set timeframe.
Tokenholder Veto: Proposals enacted by the risk manager will automatically pass unless a predefined threshold (e.g., 3% of actively delegated supply) exercises their veto power. This ensures that while decisions are made swiftly, token holders maintain ultimate oversight.
Minimized Governance Overhead: By eliminating the need for extensive forums and delegate infrastructures, this model empowers token holders to participate directly without constant weekly voting. The approach is designed for efficiency and reduced friction in decision-making.
veCOMP & Gauge Framework
We believe in governance minimization for protocol upgrades and security-related decisions, but we still want to create a system where holding the COMP token provides real utility and returns. We want to turn COMP into a productive, value-accruing asset. The goal is for COMP to be fully integrated into the protocol, incentivizing lenders and borrowers on Compound.
Based on tokenholder voting, COMP will flow through gauges programmatically to incentivize specific assets. Token holders will receive voting rights by staking COMP into a vote escrow locking contract (essentially the same as a staking contract but with added flexibility) This locker can be programmed to feature warm-up or cool-off periods,as well as voting power increases over time. This reduces the burden of frequent votes. Once a vote is set, funding flows continue autonomously until a change is required. Our gauges are fully customizable, allowing you to customize the gauge system to incentivize the user behavior that most aligns with your goals. Protocol revenue then flows to active stakers and voters.
Visualization
Why Aragon?
Proven track record: Aragon has been developing governance frameworks for 7 years. The original AragonOS was the first generalized governance smart contract framework.
Full-Stack Governance Team: Our team is composed of 20+ professionals fully dedicated to governance and tokenomics tooling, with multiple years of runway. We’re here for the long haul.
Battle-tested Staking Solution: Our audited lockers are currently in use across the ecosystem.