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    Home»Crypto & Blockchain

    Compound DAO used protocol reserves to buy $52 million worth of COMP, and delegates call it a mandate breach

    NCIJ NETWNCIJ NETWORKBy NCIJ NETWNCIJ NETWORKSeptember 29, 2026 Crypto & Blockchain No Comments3 Mins Read
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    A new on-chain reconstruction says COMP acquired, through Compound DAO reserves, a majority of all delegated voting power at a May snapshot. That position did not change the recorded result that Proposal 582 passed with zero votes against.

    Bitquery says 344,780 COMP arrived in a DAO reserve wallet at 09:46 UTC on May 5, 58 minutes before the snapshot fixed voting power. That wallet had delegated its votes to the Compound Foundation, which backed the plan.

    The link between the reserves spent and the COMP received runs through a Binance account, and public chain data alone cannot prove the withdrawal’s funding account.

    The purchase has reopened a dispute over the Foundation’s authority to use DAO assets in governance. Compound forum delegate ugurmersin alleged on Sept. 27 that the conversion and delegation breached the reserve mandate.

    In a Sept. 28 response, the Foundation said the conversion was consistent with the mandate’s governance-continuity purpose, the COMP remained DAO-owned, and none of the assets had been spent on Foundation operations.

    Why the extra votes were key in the Compound proposal

    Bitquery counted 1,883,966 votes eventually cast for the plan out of 3,757,805 total delegated votes at the May 5 snapshot. Supporters controlled 50.1% of the voting power available for that vote, so even if every other delegate had voted no, they could not have outvoted the supporters.

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    How 344,780 COMP shaped the margin for Compound
    A 344,780 COMP transfer arrived 58 minutes before Proposal 582 cleared the 50% voting threshold by 0.1 point.

    By subtracting the 344,780 COMP from the reserve wallet, the same supporters would have held 1,539,186 of a reduced 3,413,025-vote total (45.1%), leaving enough voting power outside their bloc to defeat the plan.

    Tally recorded roughly 1.88 million votes for Proposal 582 and none against, so the plan would still have cleared its 400,000-vote quorum without the reserve-wallet COMP.

    Related Reading

    DAOs are forcing crypto protocols to choose between code and emergency brakes

    The $52 million figure describes an approved V4 program budget. Proposal 582 designated $14 million for a Foundation-controlled operational wallet and $38 million for a Treasury Management Committee pool, with releases tied to milestones.

    The earlier Proposal 536 placed approximately 8.42 million DAI of old protocol reserves under Foundation stewardship for protocol operations and governance continuity. It kept the assets DAO-owned and excluded discretionary trading and Foundation-specific expenses.

    The Foundation and the delegate disagree over whether converting those reserves into voting power fit those limits. The May vote’s outcome is settled, but the authority to make that conversion remains contested.

    breach Buy call comp compound DAO delegates mandate Million Protocol Reserves worth
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