KVORUM
compoundSource: Compound governor bravo · #100

COMP Rewards Adjustments - Kickstart Rewards: Step Two

defeatedApr 21, 2022, 01:33 AM UTCbyC80xc8a6…dffc

01Summary

AISummary by Kvorumclaude-haiku-4-5

Proposal to slash existing COMP rewards to zero across all markets as step two of ending the current COMP farming rewards program. The goal is to eliminate the problematic practice of users instantly selling distributed COMP and instead redirect incentives toward a new kickstart rewards program focused on launching new markets that benefit the protocol.

Type
parameter change

Key changes

  • Set COMP supply-side rewards to 0 across all 10 markets(high)
  • Set COMP demand-side rewards to 0 across all 10 markets(high)
  • End current COMP farming rewards program to stop instant sell-off of distributed tokens(high)
  • Transition toward new kickstart rewards program focused on launching new markets(high)

Notable concerns

  • COMP farming for profit has caused existing users and token holders to experience dilution of their protocol share
  • Current rewards program distributes COMP that is immediately sold off rather than used beneficially for the protocol
Contracts0x4Ddc2D193948926D02f9B1fE9e1daa0718270ED50x39AA39c021dfbaE8faC545936693aC917d5E75630x5d3a536E4D6DbD6114cc1Ead35777bAB948E36430xccF4429DB6322D5C611ee964527D42E5d685DD6a0xf650C3d88D12dB855b8bf7D11Be6C55A4e07dCC90x35A18000230DA775CAc24873d00Ff85BccdeD5500xFAce851a4921ce59e912d19329929CE6da6EB0c70xB3319f5D18Bc0D84dD1b4825Dcde5d5f7266d4070x6C8c6b02E7b2BE14d4fA6022Dfd6d75921D90E4E0x70e36f6BF80a52b3B46b3aF8e106CC0ed743E8e4
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
Read the description ↗

02Description

198 words

COMP Rewards Adjustments - Kickstart Rewards: Step Two

The initial objective of the COMP rewards program was to distribute the token to our users. While this was an effective way to kickstart Compound and reward early users, the practice of COMP farming for profit has become very problematic.

Since most COMP being distributed by the current rewards program is instantly sold off, existing users and token holders are at a great disservice. Their share of the protocol is being diluted for nothing other than farming COMP for profit. This COMP farming behavior is not the kind of activity that will bring value to the protocol, or for the existing users and token holders. Incentives need to be used to grow the protocol to the benefit of the protocol itself and its users and token holders.

Going forward, I believe it’s best to end the current COMP rewards program and to start a new one with the sole purpose of kickstarting new markets: kickstart rewards.

This proposal is the second step towards launching the new rewards program - existing rewards are being slashed to 0.

For more information and discussion, please visit the discussion thread on the forums.

03Mismatch analysis

AIMismatch analysis by Kvorumclaude-sonnet-5
Consistent

The proposal describes ending the current COMP rewards program by slashing existing COMP speeds to zero, as the second step of a broader kickstart rewards initiative. The single decoded action calls _setCompSpeeds with an array of ten market addresses and sets both the supply and borrow speed arrays entirely to '0'. This is a direct, literal match to the description's core claim: 'existing rewards are being slashed to 0.' There is no mention in the description of specific dollar amounts, percentages, or individual markets that could be checked for value mismatches beyond the zeroing itself, and the calldata does not introduce any additional actions (e.g., fund transfers, role changes) that go beyond what's described. The target contract address is consistent with a Comptroller-style call for this function signature, and no alternate recipient or target is implied by the prose that would conflict with the calldata. No omissions, extra claims, or misleading characterizations were found — the magnitude and direction of the change (full zeroing) matches exactly what the description states. Confidence is high because the action is simple, singular, and the description's claim maps unambiguously to the calldata's effect.

Generated by Kvorum
model: claude-sonnet-5
provider: anthropic
profile: anthropic-strong-v1
prompt: v1.0
generated: 2mo ago
Review the decoded actions ↗

04Actions

1 total
#0_setCompSpeeds(address[],uint256[],uint256[])chain 0x1
Target
0x3d98…cd3b
Value
0 wei
Function
_setCompSpeeds(address[],uint256[],uint256[])
Arguments
{
  "0": [
    "0x4Ddc2D193948926D02f9B1fE9e1daa0718270ED5",
    "0x39AA39c021dfbaE8faC545936693aC917d5E7563",
    "0x5d3a536E4D6DbD6114cc1Ead35777bAB948E3643",
    "0xccF4429DB6322D5C611ee964527D42E5d685DD6a",
    "0xf650C3d88D12dB855b8bf7D11Be6C55A4e07dCC9",
    "0x35A18000230DA775CAc24873d00Ff85BccdeD550",
    "0xFAce851a4921ce59e912d19329929CE6da6EB0c7",
    "0xB3319f5D18Bc0D84dD1b4825Dcde5d5f7266d407",
    "0x6C8c6b02E7b2BE14d4fA6022Dfd6d75921D90E4E",
    "0x70e36f6BF80a52b3B46b3aF8e106CC0ed743E8e4"
  ],
  "1": [
    "0",
    "0",
    "0",
    "0",
    "0",
    "0",
    "0",
    "0",
    "0",
    "0"
  ],
  "2": [
    "0",
    "0",
    "0",
    "0",
    "0",
    "0",
    "0",
    "0",
    "0",
    "0"
  ]
}
Calldata

05Tally

Summed from votes

Voters0
VP participating0
Outcome (current)—
Current support—

06Voters

0 total

No votes recorded yet.

07Forum

AIForum synthesis by Kvorumclaude-sonnet-5
sentiment · contentiousthread · constructive

Arguments for

  • Current COMP rewards are overwhelmingly farmed and immediately sold, diluting loyal holders without benefiting the protocol, so the program should be ended.— TylerEther, ClairvoyantLabs, simpsi23, ManoWar, RobW
  • Liquidity mining is economically unprofitable for tokenholders since acquisition cost of unsticky liquidity exceeds its lifetime value, so ending blanket subsidies benefits tokenholders and reduces inflation.— GFXlabs, sukernik, EricComp
  • Peer protocols like Aave are ending similar liquidity mining programs, suggesting Compound should follow suit to stay competitive and avoid falling behind on capital efficiency.— GFXlabs, ClairvoyantLabs, devenmatthews
  • Ending indiscriminate rewards is a forcing function to focus resources on more valuable initiatives like Compound III and better-targeted incentive design.— 0x7751, TylerEther
  • Data from the initial 50% cut showed minimal negative impact on TVL, utilization, and rates, indicating the market can absorb further reductions safely.— TylerEther, EricComp, GFXlabs
  • The plan is not a full end to COMP incentives but a transition to more targeted 'kickstart rewards' that bootstrap new markets more efficiently than blanket distribution.— TylerEther, GFXlabs, 0x7751

Arguments against

  • It is too soon after the first 50% cut to have enough data to justify a further drastic change; more time and analysis are needed before acting.— hayesgm, Sirokko, monet-supply, franklin-pantera, jared
  • Ending COMP distribution undermines decentralization of governance and ownership, which should remain governance's primary objective, without a clear replacement plan for distributing tokens broadly.— hayesgm, allthecolors, madhavvats
  • Cutting rewards abruptly to zero is far riskier and more asymmetric than a gradual, measured reduction, risking sudden liquidity flight that may be hard to reverse.— allthecolors, twoodward, monet-supply, franklin-pantera, dvf
  • Abrupt, unpredictable changes threaten Compound's reputation as stable base-layer infrastructure and risk driving away integrating protocols and their liquidity.— twoodward
  • Community consultation on this significant change has been insufficient, with too few voices and too little discussion for a decision of this magnitude.— hayesgm, ClairvoyantLabs
  • A more targeted, asset-specific reduction (e.g., cutting non-core or non-stablecoin incentives more aggressively while preserving others) would be safer than a blanket removal.— monet-supply
  • The replacement 'kickstart rewards' program lacked concrete numbers and details at the time of the vote, making it premature to dismantle the existing system first.— Sirokko, monet-supply, franklin-pantera

Unresolved concerns

  • Whether the reserve factor should be reduced in tandem with COMP reward cuts to offset the capital efficiency loss to depositors was raised but never addressed.— psykeeper, coburncoburn
  • How sticky new 'kickstart' liquidity will be once its fixed 3-month incentive period ends remains uncertain and hard to generalize from other protocols' experience.— allthecolors, TylerEther, 0x7751
  • Whether COMP locked as collateral (cCOMP) should carry voting rights, potentially affecting the outcome of close votes like this one, was raised without resolution.— EricComp
  • The idea of using protocol reserves for protocol-owned liquidity or a treasury of non-native reserve assets was floated favorably but never developed into a concrete plan.— Sirokko, TylerEther, Ruslan0990
  • Coordinating reward reductions with other protocols like Aave was suggested but flagged as potentially illegal (antitrust/price-fixing) and left unresolved.— monet-supply, dvf

Notable participants

  • TylerEtherProposer who authored the phased rewards cut and kickstart rewards plan, submitted on-chain proposals, and responded extensively to community feedback.
  • hayesgmCore contributor who raised process and decentralization concerns and urged tabling the proposal for more community input.
  • allthecolorsVoted against, emphasized decentralization value of pro rata distribution and asymmetry of abrupt cuts, later engaged constructively on kickstart mechanics.
  • twoodwardNotional Finance co-founder representing an integrating protocol's perspective, voiced strong opposition citing reliability and competitive risk.
  • GFXlabsContributor who voted in favor with data-driven analysis supporting ending blanket COMP subsidies.
  • monet-supplyVoted against, proposed a detailed targeted/asset-specific reduction alternative and highlighted asymmetric liquidity acquisition costs.
  • franklin-panteraVoted no on behalf of Pantera Capital, arguing the proposal was directionally right but poorly sequenced and timed.
  • madhavvatsVoted against on behalf of ChicagoDAO/a16z delegation, citing lack of replacement mechanism and decentralization risks.
  • sukernikProvided a stakeholder-incentive analysis framing the debate among users, tokenholders, core team, and contributors.
  • SirokkoFrequent skeptical voice challenging the dilution narrative, decentralization claims, and rush to cut rewards before presenting a new model.
Generated by Kvorum
model: claude-sonnet-5
provider: anthropic
profile: anthropic-strong-v1
prompt: v1.0
generated: 2mo ago
Open the thread ↗