Compound Finance Faces Governance Attack by Humpy Over $25 Million Proposal

Jul 28, 2024, 10:58 PM

A recent event in the decentralized finance (DeFi) sector has raised concerns over governance vulnerabilities. A proposal to allocate $25 million from Compound Finance's DAO treasury was passed, leading to accusations of a governance attack. The proposal, pushed through by a whale known as Humpy, involved the accumulation of 682,000 COMP tokens to secure the vote. Humpy successfully granted himself 490,000 COMP tokens. This incident, which marks the third proposal from the governance attacker, has sparked debate within the community, with some arguing that it was a legitimate use of governance mechanisms, while others see it as a security flaw. The event highlights the risks associated with valueless governance tokens and the need for better safeguards in DeFi protocols. Notably, the delegate tokens for the proposal came from ByBit.