Is the Compound Foundation 'Self-Theft'?

Author: Eric, Foresight News

On September 28, a post titled "Foundation Misappropriates v2 DAI Reserves" appeared on the Compound governance forum.

The author, ugurmersin, accused the Compound Foundation of violating governance authorization by exchanging 8.42 million DAI reserves entrusted to the DAO for governance tokens COMP, and delegating voting rights to the foundation's own address just 58 minutes before the deadline for a key proposal vote, thus facilitating the transfer of $52 million for the V4 plan and financial management authority. The post included a complete on-chain transaction record, used harsh language, and implied that evidence had been retained for legal action.

Upon verification, the funding path described in the post was largely accurate. After the issue was exposed, COMP only saw a slight decline of about 1%, and began a sustained rebound starting at 11 AM today. As of the time of writing, the COMP price was reported at $24.55, having recovered all of yesterday's losses.

On March 10, the foundation's multi-signature address starting with 0x0F51 exchanged 8.42 million DAI for an equivalent amount of USDC through Spark PSM 1:1, which was then deposited into the Compound v3 USDC market;

From March 11 to 12, the Compound Foundation first spent about 430,000 USDC to buy 25,000 COMP over-the-counter. On April 9, 15, and 25, it withdrew 798.8 million USDC from v3 in three transactions, transferring it to an intermediate wallet starting with 0xfb20, which subsequently flowed into a Binance deposit account in million-dollar increments;

Subsequently, an address starting with 0xb03e withdrew approximately 420,000 COMP from Binance hot wallets and Wintermute addresses. On May 5, 344,780 COMP were transferred back to the foundation's multi-signature address via an intermediary address starting with 0x729d.

Independent verification by third-party data agency Bitquery confirmed that this batch of DAI was indeed exchanged for USDC and flowed into Binance through trading desks, with approximately 345,000 COMP subsequently flowing out of the exchange and back to the multi-signature wallet managed by the foundation. The funds were indeed received less than an hour before the proposal snapshot, and voting rights had already been delegated to the foundation's public voting address. The foundation later issued a statement acknowledging the transaction but argued that it was within the authorized scope necessary to maintain COMP reserves for governance execution as per the original proposal, and that the assets remained owned by the DAO and were not used for the foundation's own expenses.

If the story ended here, it would seem to be a typical case of trustee overreach. However, Bitquery's verification also revealed another side of the post. Just five days before the post, the same author had written in another post on the forum, "As everyone here knows, Humpy is delegating votes to me." This statement shifted the nature of the entire incident.

Humpy is one of the most controversial whales in the DeFi space. In 2022, he accumulated voting weight through Balancer to influence governance decisions, and after nearly a year of entanglement, both parties were forced to sign a settlement agreement. In March 2024, the head of SushiSwap publicly accused him of attempting to manipulate token emissions to flow into his own liquidity pool. In July of the same year, his group, the Golden Boys, pushed through Compound's Proposal 289 after three attempts, attempting to transfer $24 million worth of treasury COMP into yield products under his control, which was widely regarded as a governance attack by the community, ultimately resulting in a settlement plan to increase proposal execution delays and establish staking products. Security firms such as OpenZeppelin and Wintermute characterized it at the time as a predatory attack on the protocol.

On-chain records show that after May 2026, address clusters associated with Humpy became active again.

Bitquery tracked 33 wallets holding approximately 1.61 million voting rights, with this batch of COMP tokens gradually aggregated into one address between May and September, which exercised voting rights uniformly. On September 14, a delegation of about 25,000 votes allowed this address to cross the threshold required to submit proposals. Five days later, Proposal 608 was put on-chain, which aimed to transfer control of a new institutional lending market to DAO governance, and this proposal was drafted by ugurmersin himself on September 9 in the forum. The associated cluster passed it with 1.77 million votes in favor, while the foundation cast a dissenting vote but was unable to stop it. The subsequent Proposal 609 was then rejected by the same voting pool.

This reversed the situation of the event itself. The COMP purchased with reserves by the foundation immunized Proposals 580 and 582 against potential opposing votes from that cluster, meaning that without this batch of tokens, the votes held by that cluster could have overturned the proposals at that time. In other words, this controversial purchase effectively countered the forces associated with the poster. At the time the accusation post was published, that cluster had just successfully expanded its power through its own proposal and demonstrated the ability to veto others' proposals for the first time.

The core task of Compound in the past six months has been to develop the v4 version, focusing on institutional credit infrastructure, RWA support, capital efficiency improvement, liquidation mechanism upgrades, and partner integration tools. The controversial proposal in question was a routine proposal to hand over the remaining reserves in the market to the foundation for management after abolishing the v2 version.

In May, Compound established the "Treasury Management Committee," responsible for managing almost all treasury assets of Compound DAO. This committee is a multi-signature controlled body responsible for allocating treasury funds to professional fund managers (through RFP bidding) for prudent asset management.

The foundation's use of the remaining funds from the deprecated version is essentially a defensive operation to ensure the smooth development of the protocol's "grand plan," the v4 version. On the other hand, Compound's actions also align with a major trend in current DAO governance, which is to partially reclaim the management authority of funds back to the project team, "concentrating efforts to accomplish major tasks."

On September 8, Compound launched its first v4-related product, the Institutional Market, providing a USDC lending market that accepts ETH, wstETH, WBTC, cbBTC, etc., as collateral, with a maximum LTV of 87% and higher liquidation thresholds. Within a week of its launch, deposits amounted to approximately $20 million, and loans reached about $14.8 million.

It is important to emphasize that the on-chain facts upon which the accusations are based have not been overturned. The conversion of DAI to COMP is real, the delegation to the foundation's own address is real, and the funds arriving 58 minutes before the snapshot is also real. The community still has reason to question whether the foundation's operations fully comply with the original intent of authorization. But equally true is that the person making the accusations is publicly accepting delegation from a whale with a history of multiple governance attacks, and the proposal drafted by him relied on that voting pool to pass, with the timing of the accusations occurring just after the balance of power had shifted between the two parties. This is difficult to view as a neutral community oversight, but rather as a public relations offensive in a two-year-long power struggle.

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