OpenZeppelin Security Partnership - 2022 Q3 Adjustment
01Summary
OpenZeppelin's quarterly security partnership payment is being adjusted to a lump-sum structure. The DAO will transfer 26,316 COMP (worth $1M USD) from the Timelock to OpenZeppelin's address instead of continuous streams, addressing market volatility concerns while maintaining the original $1M quarterly compensation.
- Type
- treasury allocation
- Funding
- $$1,000,000
Key changes
- Change from continuous COMP stream to lump-sum quarterly payment for OpenZeppelin security services(high)
- Set contributor COMP speed to 0 for OpenZeppelin address (0x57C970568668087c05352456a3F59B58B0330066)(high)
- Transfer 26,316 COMP tokens from Timelock to OpenZeppelin for Q3 2022 payment(high)
Notable concerns
- Payment structure change from streaming to lump-sum may require operational adjustments
- Compensation amount fixed in COMP while denominated in USD introduces price volatility exposure going forward
Generated by Kvorum
02Description
OpenZeppelin Security Partnership - 2022 Q3 Adjustment
Background
Starting on Dec 21st, 2021, OpenZeppelin was selected to offer the Compound DAO security services including continuous audit, security advisory, and monitoring. At the start of every quarter OpenZeppelin will create a proposal to update the service fee payment.
Compensation Structure
After discussion with the community, we will receive our next quarterly payment in a lump-sum rather than a continous stream to address recent market volatility. The dollar value of $1M in COMP remains the same as the original agreement. Based on the last week's average price, this would be $38 per COMP for a total quarterly payment of 26,316 COMP equaling $1M. This COMP would be transferred from the Timelock's existing balance.
More detail in this forum post
03Mismatch analysis
The proposal describes two conceptual changes: (1) halting the continuous COMP stream in favor of a lump-sum payment, and (2) transferring approximately 26,316 COMP (≈$1M at $38/COMP) from the Timelock to OpenZeppelin. The calldata contains exactly two actions matching this: action 0 sets the contributor's COMP speed to zero (stopping the stream) for the same recipient address used in action 1, and action 1 transfers 26,315.7894736842 COMP — which rounds to the stated 26,316 COMP — via a transfer call on the COMP token contract, consistent with a Timelock-held balance transfer. The dollar/COMP math checks out (26,315.79 COMP × $38 ≈ $1,000,000). The only minor gap is that the description doesn't explicitly call out the underlying mechanism of stopping the stream (the _setContributorCompSpeed call), but this is a direct and expected consequence of the stated shift to lump-sum payment, so it counts as legitimate summarization rather than a material omission. No value, target, or intent mismatches were found.
Discrepancies
- lowomitted in description
The description does not explicitly mention the on-chain action that zeroes out the contributor's COMP streaming speed, though this is a necessary and logical consequence of switching to a lump-sum payment as described.
“we will receive our next quarterly payment in a lump-sum rather than a continous stream”
Generated by Kvorum
04Actions
- Target
- 0x3d98…cd3b
- Value
- 0 wei
- Function
- _setContributorCompSpeed(address,uint256)
- Arguments
{ "0": "0x57C970568668087c05352456a3F59B58B0330066", "1": "0" }- Calldata
- Target
- 0xc00e…6888
- Value
- 0 wei
- Function
- transfer(address,uint256)
- Arguments
{ "0": "0x57C970568668087c05352456a3F59B58B0330066", "1": "26315789473684200000000" }- Calldata
05Tally
Summed from votes
06Voters
No votes recorded yet.
07Forum
- OpenZeppelin Security Partnership - 2022 Q3 Adjustment ↗discourse · high confidence
Arguments for
- OpenZeppelin argued that COMP's market decline has effectively cut their compensation value by ~75%, forcing them to consider selling COMP to cover fiat costs unless the payment structure is adjusted.— cylon
- OpenZeppelin cited precedent for USDC-based service provider payments, referencing Proposal 56/59 and the Certora 50/50 COMP/USDC arrangement.— cylon
- OpenZeppelin committed to holding the majority of its COMP long-term to stay aligned with the DAO's incentives, even while needing some liquidity for operations.— cylon
- Paying OpenZeppelin a lump-sum of COMP upfront each quarter (rather than a continuous stream) would reduce price risk without touching USDC reserves.— rleshner, cylon
- Selling ~30k COMP (the quarterly amount) is unlikely to meaningfully impact market price given daily CEX volumes exceeding $50M, especially if spread across venues and time.— Sirokko
- OpenZeppelin agreed to sell the lump-sum COMP in slow tranches and use a weekly VWAP calculation to minimize market impact and reflect rapid price movements.— cylon
Arguments against
- Draining $2M/year from cUSDC reserves is unsustainable, sets a bad precedent for other service providers to request reserve funds, and depletes reserves meant to protect users from losses and illiquidity.— rleshner
- It is unfair to ask the DAO to change compensation terms now, since OpenZeppelin benefited from potential COMP price upside when agreeing to be paid in COMP, and market downside risk should have been anticipated.— ClairvoyantLabs
- OpenZeppelin's cash-flow problem was self-created by their own reckless decision to hold nearly all awarded COMP without diversifying or selling any despite known fiat obligations.— Sirokko
- The Compound treasury is already overloaded with COMP and needs more diversified reserve assets (stablecoins, ETH/WBTC); giving away USDC rather than retaining it for treasury diversification is not in the protocol's interest.— Sirokko
- Using COMP as collateral for the protocol or for OpenZeppelin to borrow USDC is an unnecessary and risky move given COMP's volatility, and should be rejected as an alternative.— Sirokko
- Broader concerns that Compound's ecosystem is struggling (community disengagement, lack of new asset listings, opaque Compound III development), calling into question the wisdom of accommodating OpenZeppelin's request.— ClairvoyantLabs
Unresolved concerns
- Broader criticisms about Compound's governance transparency, stagnant asset listings, and unclear Compound III development progress were raised but never addressed in the thread.— ClairvoyantLabs
- Sirokko's suggestion to stream the lump-sum COMP payment over a week or month (rather than a single lump sum) to prevent irresponsible immediate selling was not adopted or discussed further.— Sirokko
- The concern that Compound's treasury is overly concentrated in COMP with no diversification into external reserve assets was not resolved by the final proposal.— Sirokko
- Whether this arrangement sets a lasting precedent for altering agreed compensation structures with other service providers was not fully resolved, even though USDC reserves were ultimately not used.— rleshner, cylon
Notable participants
- cylonOpenZeppelin representative who authored the proposal, responded to community feedback, and adjusted the plan to a COMP lump-sum before submitting the final governance proposal.
- rleshnerRaised foundational concerns about protocol reserves and COMP's purpose, proposing alternative compensation structures that shaped the final outcome.
- SirokkoProvided the most detailed critical analysis, opposing reserve usage and borrowing-based alternatives while supporting a COMP lump-sum payment.
- ClairvoyantLabsVoiced strong opposition to the proposal on fairness grounds and raised broader unrelated criticisms of Compound's governance and development transparency.
Generated by Kvorum
08Similar proposals
- compoundexecutedOpenZeppelin Security Partnership - 2022 Q4 Adjustment96%
- compoundexecutedOpenZeppelin Security Partnership - 2023 Q1 Compensation92%
- compoundexecutedOpenZeppelin Security Partnership - 2023 Q3 Compensation92%
- compoundexecutedOpenZeppelin Security Partnership - 2023 Q2 Compensation92%
- compounddefeatedOpenZeppelin Security Partnership - 2024 Q2 Compensation91%
- compoundexecutedOpenZeppelin Security Partnership - 2023 Q4 Compensation91%
- compoundexecutedOpenZeppelin Security Partnership - 2024 Q2 Compensation91%
- compoundexecutedOpenZeppelin Security Partnership - 2024 Q1 Compensation91%
- compoundcanceled"# OpenZeppelin Security Partnership - 2023 Q4 Compensation ## Background Starting on Dec 21st, 2021, OpenZeppelin was [selected](https://compound.finance/governance/proposals/76) to offer the Compo…89%
- compoundexecutedComet Vulnerability Disclosure (Patched) - Bug Bounty Program Reward67%