Compound Nearly Passed Vote to Release $24 Million

Compound nearly transferred 499,000 COMP, valued at approximately $24 million, to a vehicle controlled by a minority of voters in July 2024. Proposal 289 saw a reversal just before the deadline, passing with 682,191 votes in favor against 633,636 votes against. In the last 34 minutes, 563,591 votes were cast in support, accounting for 82% of all supportive votes. The final batch of votes came in 8 minutes before the end, revealing a lack of emergency authority to pause execution. Subsequently, Compound reached an agreement to cancel the allocation and added a veto feature in governance. This incident exemplifies a recurring dilemma in DAOs: strengthening defenses against hostile voting often grants certain participants more power over the process or outcome. Two studies in 2026 conducted by the Max Planck Institute for Software Systems and Vrije Universiteit Amsterdam analyzed 48 large DAOs on Ethereum, noting that registration, staking, and delegation can concentrate voting power and outlined attacks that follow effective governance rules. In one of the surveys, researchers categorized 28 incidents within DAOs, indicating that 16 of them could have been avoided through alternative mechanisms. Compound was listed as a primary case, with the image of this case credited to Pahari et al. The materials state that Compound adopted an "emergency brake," while other DAOs undergoing review in 2024 also face late accumulation and relatively easy access to voting power, including Uniswap, Radicle, Gitcoin, Silo, Ampleforth, Hop, and Cryptex.

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