Compound Implements Historic Community-Driven Governance Proposals

Decentralized finance, or DeFi, protocol, Compound, has implemented its first two community-driven governance proposals in the past week.

The proposals come ahead of the launch of Compound’s Governance token (COMP) — which will be used to facilitate community-driven protocol upgrades and development.

Compound implements community upgrades

The first proposal asked the community whether the Compound protocol should introduce support for Tether (USDT), inspired by a September 2019 poll that saw Tether and Maker (MKR) rank as the top two most-requested crypto assets for Compound. 

The vote saw over 90% of the Compound community vote in favor of USDT support and was executed on May 1. The proposal introduced USDT as “a borrowable asset with its own interest rate,” however, Tether will not be supported as collateral.

To support USDT, the Compound team developed a modified cToken contract introducing support token transfer fees in underlying tokens.

Community drives change to Dai interest

On April 27, DeFi app, Dharma, submitted Compound’s second governance proposal — seeking to adjust the interest rate mode for DAI on the platform.

The proposal sought to create a steady upward trajectory for cDAI interest rates, replacing the current system where minimal interest is earned until over 90% of cDAI is lent on the platform.

Dharma’s proposal was passed on April 30 with a whopping 97% approval rate. 

The implementation of the proposals has been described as the first upgrade to a major DeFi protocol exclusively conceived and developed by the platform’s users as opposed to a centralized foundation.