Compound (COMP) Price Drops 6% as 'Golden Boys' Group Launches 'Governance Attack' on the Protocol

Compound, one of the leading lending platforms in the altcoin world, has been seriously shaken by recent developments. The platform's native token COMP has lost more than 6% of its value following recent developments.

A group called “Golden Boys” has managed to accept a proposal to allocate $24 million worth of COMP tokens to a protocol called goldCOMP, which is designed to generate passive income for COMP holders. However, this move has sparked concerns among major investors, who are calling it a “governance attack” on the protocol.

The incident began as a coordinated effort led by a whale nickname “Humpy,” who acquired a large amount of COMP tokens with the aim of transferring $24 million worth of COMP tokens to the goldCOMP protocol, which he controls. The group, prepared three different proposals to implement Humpy’s plan.

The first proposal, Proposal 118, called for transferring 5% of the COMP treasury to a multi-signature wallet controlled by the Golden Boys, but was ultimately rejected due to suspicious circumstances.

The second proposal, Proposal 247, aimed to deposit 5% of COMP tokens into the goldCOMP vault, but was canceled due to insufficient support.

The third and final Proposal 289, however, had the same goal but took a different approach. It proposed to allocate 5% of the treasury to a smart contract that would automatically transfer the funds to the goldCOMP vault after a seven-day delay. This proposal was ultimately accepted, giving the group control over the funds.

Humpy and Golden Boys’ moves were alleged to be aimed at “stealing funds,” Humpy denied the accusations. He argued that the GoldCOMP fund that has become valid is built on “a trust structure that includes a set of restrictions to prevent theft or diversion of funds.”

However, the community took action in response to Golden Boys’ success. Proposal 290, which will be put to the vote in about a day, aims to change the powers of the Timelock Admin, the smart contract that queues governance actions. This will allow governance decisions to go into effect with a two-day delay, giving the community more time to react. This move could prevent future governance attacks, but it remains unclear whether it will block the COMP tokens that Golden Boys are after.

With the development, COMP price dropped by 6 percent.

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