It takes 100,000 $COMP to create a Governance Proposal. That's a lot.
Now, community members with 100 $COMP can deploy an Autonomous Proposal, a smart contract used to gather public support. When it gets enough votes, it becomes a formal proposal.https://t.co/3tYv476da9
— Compound Labs (@compoundfinance) September 10, 2020
Autonomous Proposals are a new type of smart contract allowing users with at least 100 COMP tokens to submit a governance draft. When 100,000 COMP is delegated to the proposal address, a function is called which triggers a formal governance vote.
Given the current threshold of 100,000 COMP needed to create a proposal, CAPs allow smaller holders to make proposals while mitigating the risk of spam due to a 1% of tokens needing to be delegated towards the vote. While CAP tokens are locked during the delegation period, proposers can either wait for the proposal to pass or terminate the proposal, ending the CAP and returning the COMP to the creator’s wallet.
For perspective, the change to 100 COMP for a CAP is a reduction of 1/1000 of tokens required. In US dollars, that is equivalent of 180,000,000 USD for a formal governance proposal as opposed to 18,000 USD needed to start a CAP.
The launch of CAP’s was kicked off by a vote to set the Pause Guardian to a 4-of-6 community multisig, signalling the first of many community-oriented proposals to further decentralize control of a leading DeFi protocol.
Alongside CAPs, Compound also released documentation on the allocation of the 775,000 COMP set aside for future incentives. With 500,000 COMP allocated to Coinbase Earn campaigns, the remaining 225,000 will be allocated to a community-owned Resovoir contract for future governance incentives.
When community governance first went live, we reserved 775,000 $COMP “for the community to advance governance through other means".
Those tokens have been set aside for education and allocation through the Governance process.https://t.co/uKsJ83W3ZD
— Compound Labs (@compoundfinance) September 11, 2020
With the launch of CAP alongside a reduced COMP emission schedule, it’s clear that Compound is taking a strong stance on progressive governance. With the ability for smaller tokenholders to be more active in governance, we expect Compound’s delegation feature to see a lot more use in the coming months.
In the meantime, be sure to stay up with Compound by following them on Twitter.
Tarang discovered ETH in 2018 and has been actively involved in DeFi after finding PoolTogether in 2019. He’s most interested in the DEX sector as a frequent user and participant in Uniswap and Kyber Network alongside lending protocols like Aave. Tarang’s active presence in DeFi has given him a front-row seat to cutting edge trends and real-time developments. Stay up with Tarang by following him on Twitter.