Allegations Surface Over Fund Handling

A delegate on the Compound community forum has accused the Compound Foundation of diverting approximately 8.42 million DAI from the protocol’s decentralized autonomous organization reserves. The funds, which were meant to support only protocol operations, were allegedly converted into 344,780 COMP tokens on an exchange before being returned to a treasury multisig.

Blockchain transaction records cited in the claim show the DAI moved to an exchange and back as COMP. The tokens were then delegated to the foundation’s own voting address by the multisig signers. This occurred just 58 minutes before voting deadlines on proposals 580 and 582.

Proposal 536, approved in February, placed the DAI under foundation management strictly for protocol operations. It explicitly barred any discretionary trading, speculative activity, or use to fund the foundation’s own operations. The proposal stated that the funds remained entirely owned by the DAO.

Votes Enable Major Governance Shifts

The delegate argues that the additional voting power from the COMP tokens was decisive in passing two proposals. These measures transferred nearly all DAO funds to the Treasury Management Committee, of which the foundation is a signer. They also approved a $52 million V4 program that the delegate says benefits the foundation.

Representatives from the Compound Growth Working Group, security firm Certora, and auditor ChainSecurity were among those supporting the proposals. The claim further notes that many involved parties reportedly referred to the funds as “liquid” DAI during the period, even after the conversion to COMP.

Foundation Has Not Responded

The Compound Foundation has not issued a public statement as of the latest available information. The delegate left the forum open for comments from the foundation, the Growth Working Group, Certora, and ChainSecurity, while confirming that the complete on-chain record and related communications have been preserved.

Broader Context in DeFi Governance

Compound Finance operates with a total value locked of roughly $1.6 billion and a COMP market capitalization near $230 million, based on current market data. The accusation adds to ongoing discussions about treasury management and voting processes within decentralized protocols.

Similar governance disputes have arisen at other leading lending platforms in recent months, highlighting challenges in balancing protocol autonomy with community oversight. Compound’s community multisig, which includes signers from Certora, ChainSecurity, PGov, and others, continues to handle treasury-related decisions.

The delegate has invited all named parties to address the claims directly, emphasizing the transparency of the preserved documentation.