Reduce COMP emissions by 20%
01Summary
Proposal to reduce COMP token emissions by 20% from 0.44 COMP per block to 0.352 COMP per block, aimed at building a protocol reserve for security audits, feature development, voter incentives, and liquidity incentivization while reducing emissions to short-term holders and exchanges.
- Type
- parameter change
Key changes
- Reduce COMP emission rate from 0.44 COMP/block to 0.352 COMP/block (20% reduction)(high)
- Establish protocol reserve of COMP tokens for security audits, feature development, voter participation incentives, and liquidity incentivization(high)
- Shift COMP allocation away from short-term holders and centralized exchanges toward protocol development and user onboarding(medium)
Notable concerns
- Analysis based on Gauntlet and Nansen data showing current emissions primarily benefit short-term holders and exchanges rather than protocol development
- Proposal intends to implement COMP emission vesting in subsequent actions to further direct tokens toward intended uses
Generated by Kvorum
02Description
Reduce COMP emissions by 20%
As COMP has grown into one of the more robustly traded and earned DeFi assets, it is time to assess emission rate. Analysis by Gauntlet suggests that the current emission rate of 0.44 COMP / block is too high. Our aim in reducing emissions is two-fold. Firstly, we want to ensure that the protocol builds up a reserve of COMP that can be used for paying for other community needs. These needs include (but are not limited to) further security audits, funding feature development, incentivizing voters for participating, and liquidity incentivization. Secondly, we believe that the current emissions are too high to simply provide liquidity. Our analysis, combined with data from Nansen (below), illustrates that the majority of COMP goes to short-term holders and centralized exchanges.
We and others believe that COMP should be used for furthering protocol development and onboarding new users to the protocol. By first lowering the emissions rate and subsequently adding COMP emission vesting, we believe that COMP can be utilized to achieve these goals.
03Mismatch analysis
The proposal title and body explicitly claim a 20% reduction in COMP emissions from a stated baseline of 0.44 COMP/block, which would target roughly 0.352 COMP/block. The single decoded action calls _setCompRate(176000000000000000), setting the rate to 0.176 COMP/block. Comparing 0.176 to the stated baseline of 0.44 gives a 60% reduction, not 20% — three times the magnitude described. Since this parameter directly and substantially affects protocol token emissions and community incentives, and the actual change is far larger than what delegates are told, this is a severe discrepancy that could materially affect a delegate's vote if they rely on the stated 20% figure without independently verifying the calldata value.
Discrepancies
- highvalue mismatch
The description states COMP emissions will be reduced by 20% from the current rate of 0.44 COMP/block, which would imply a new rate of about 0.352 COMP/block. The calldata instead sets the rate to 0.176 COMP/block, which is a 60% reduction from 0.44 (three times the stated cut). The magnitude of the emission cut is materially larger than what delegates are told they are voting on.
“Reduce COMP emissions by 20%”
Generated by Kvorum
04Actions
- Target
- 0x3d98…cd3b
- Value
- 0 wei
- Function
- _setCompRate(uint256)
- Arguments
{ "0": "176000000000000000" }- Calldata
05Tally
Summed from votes
06Voters
| Voter | Choice | % of total | Rationale | ||
|---|---|---|---|---|---|
| 9A0x9aa8…ccf1 | For | 345K | 26.22% | — | 6y ago |
| ED0xed40…08ff | For | 325.8K | 24.76% | — | 6y ago |
| 660x6626…c35c | For | 125.2K | 9.51% | — | 6y ago |
| 5B0x5b97…66c2 | For | 100.1K | 7.61% | — | 6y ago |
| 540x54a3…e189 | Against | 100.1K | 7.61% | — | 6y ago |
| 960x9695…893e | For | 93.5K | 7.11% | — | 6y ago |
| E50xe5a5…beb9 | For | 65K | 4.94% | — | 6y ago |
| 1D0x1d29…5d1f | Against | 50K | 3.80% | — | 6y ago |
| 500x5049…e004 | For | 30.8K | 2.34% | — | 6y ago |
| DAdakeshi.eth0xe3c9…6b21 | For | 20K | 1.52% | — | 6y ago |
| 0A0x0a09…b92e | Against | 15K | 1.14% | — | 6y ago |
| E50xe5b5…4b03 | Against | 15K | 1.14% | — | 6y ago |
| A80xa8c6…3985 | Against | 10K | 0.76% | — | 6y ago |
| B00xb032…449b | For | 9K | 0.69% | — | 6y ago |
| 2B0x2b38…bf33 | Against | 5.7K | 0.43% | — | 6y ago |
| B80xb8a6…6406 | For | 5K | 0.38% | — | 6y ago |
| 310x315d…cd5d | For | 135.5 | 0.01% | — | 6y ago |
| 470x47f2…b5aa | Against | 87.8 | 0.01% | — | 6y ago |
| 7F0x7f84…4d0b | Against | 60.8 | 0.00% | — | 6y ago |
| C00xc0c9…af7a | For | 60.3 | 0.00% | — | 6y ago |
| 4C0x4c1b…b8f7 | For | 38.2 | 0.00% | — | 6y ago |
| 9C0x9cc4…770d | For | 28.7 | 0.00% | — | 6y ago |
| 180x188c…2f28 | Against | 23.2 | 0.00% | — | 6y ago |
| 8D0x8d07…a265 | For | 10.1 | 0.00% | — | 6y ago |
| EE0xeecf…93b4 | For | 9.2 | 0.00% | — | 6y ago |
| 030x03f0…7618 | For | 8.6 | 0.00% | — | 6y ago |
| 420x425f…1116 | For | 8.5 | 0.00% | — | 6y ago |
| D70xd76a…3834 | For | 8.2 | 0.00% | — | 6y ago |
| 7B0x7bcb…b476 | Against | 7.5 | 0.00% | — | 6y ago |
| 0E0x0e13…14e4 | For | 6.4 | 0.00% | — | 6y ago |
| F40xf4c5…d572 | For | 6 | 0.00% | — | 6y ago |
| A70xa70e…7f9a | For | 5.2 | 0.00% | — | 6y ago |
| 500x50ce…5de5 | For | 4.8 | 0.00% | — | 6y ago |
| 650x65b9…f782 | For | 4.5 | 0.00% | — | 6y ago |
| D30xd353…ccc2 | Against | 3.3 | 0.00% | — | 6y ago |
| 610x61b7…d1e0 | Against | 2.8 | 0.00% | — | 6y ago |
| 850x8541…ca76 | Against | 2.5 | 0.00% | — | 6y ago |
| 7A0x7ac4…e1dc | For | 2.3 | 0.00% | — | 6y ago |
| 800x804d…a3fc | For | 1.3 | 0.00% | — | 6y ago |
| ED0xed93…47bf | For | 1 | 0.00% | — | 6y ago |
| 420x42d5…82fa | For | 1 | 0.00% | — | 6y ago |
| 0D0x0d59…ebd5 | Against | 0.6 | 0.00% | — | 6y ago |
| A50xa5c3…6a69 | Against | 0.5 | 0.00% | — | 6y ago |
| 7A0x7a1f…2d61 | Against | 0.5 | 0.00% | — | 6y ago |
| F70xf7c9…8882 | For | 0.5 | 0.00% | — | 6y ago |
| 8F0x8f42…f5dd | For | 0.4 | 0.00% | — | 6y ago |
| 2A0x2a4e…f008 | For | 0.3 | 0.00% | — | 6y ago |
| E00xe095…7452 | For | 0.3 | 0.00% | — | 6y ago |
| 630x63ca…4490 | For | 0.2 | 0.00% | — | 6y ago |
| 790x79fa…03a6 | For | 0.2 | 0.00% | — | 6y ago |
07Forum
- Compound Proposal 022: Systematically Reduce Emission Quantity ↗discourse · high confidence
Arguments for
- Reducing emissions curbs recursive leverage/wash borrowing that distorts lending markets and adds little real value to the protocol.— tarun, JacobPPhillips
- Lowering emissions eases COMP 'bleed' to exchanges/market makers and builds a reserve that can later fund bug bounties, security, and governance incentives.— tarun, rleshner, bolbo
- The change is a low-risk, incremental first step in a sequence of adjustments that will be monitored and iterated on using data.— tarun
- On-chain data (Flipside tagged exchange addresses, Monte Carlo modeling) shows COMP is overproduced by 35-40% and most farmed COMP is sold rather than held long-term.— tarun
- The proposal is a temporary fix that buys time for bigger structural changes like vesting and improved distribution logic.— JacobPPhillips, tarun
Arguments against
- The real problem is that COMP has no utility beyond speculation/governance-in-name-only; reducing emission doesn't fix this and vesting/utility changes should come first.— odette, oooh_fa, adamskrodzki, aklamun, 1A1zP1eP5
- Slowing emissions effectively slows decentralization, since initial large stakeholders retain more relative control while new participants receive less COMP.— oooh_fa, arr00, Sirokko, aklamun
- Vesting should be implemented before or instead of an emissions cut, making this an unnecessary intermediate step.— brendan_dharma, bolbo, lay2000lbs
- A 20% cut is too small to meaningfully stop farm-and-dump behavior, and any price increase from reduced supply could offset the intended effect by raising farming APY.— compoundbart, sbarinov, lay2000lbs
- The proposal lacks clarity on exactly how the resulting COMP reserve will be spent, undermining its justification.— RacerX, lay2000lbs, 1A1zP1eP5
- Governance is already concentrated among a small number of large holders, so this proposal mainly serves their interests rather than the broader community.— sbarinov, Sirokko, RacerX
- Farmers selling COMP immediately isn't necessarily harmful—it broadens awareness and brings in new users/investors.— trader-geo
Unresolved concerns
- Exactly how the COMP saved from reduced emissions will be allocated or spent was never clearly specified.— RacerX, lay2000lbs, 1A1zP1eP5
- Whether cutting emissions actually increases long-term holding, absent a vesting mechanism, remains unproven and contested.— 1A1zP1eP5, aklamun, compoundbart
- The tradeoff between reduced emissions and slowing the protocol's decentralization was not fully addressed by the proposer.— aklamun, Sirokko
- Community objected that substantive feedback and alternative proposals were not incorporated before the governance vote was initiated.— 1A1zP1eP5, trader-geo
Notable participants
- tarunProposer from Gauntlet who presented the data-driven case for the 20% emissions cut and responded extensively to community objections.
- oooh_faEarly and vocal critic arguing the proposal attacks a symptom (selling pressure) rather than the root cause and harms decentralization.
- RacerXRepeated critic questioning the proposal's motives, transparency, and governance legitimacy.
- SirokkoRaised detailed concerns about centralization of governance power and the true percentage of the emissions cut.
- lay2000lbsArgued the proposal was a roundabout way to build a reserve and wouldn't solve farm-and-dump behavior.
- JacobPPhillipsRepresented Polychain's supportive vote, framing the proposal as a reasonable interim step toward vesting.
- aklamunProvided a measured critique focusing on decentralization tradeoffs and whether reduced emission addresses holder stickiness.
- 1A1zP1eP5Criticized both the substance and the process, arguing feedback was ignored before the vote was launched.
- brendan_dharmaArgued vesting should be prioritized over reducing emissions, questioning urgency.
- sbarinovRaised concerns about COMP's fundamental value proposition and governance concentration using a pointed analogy.
Generated by Kvorum
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