Compound COMP token has just gone live in a bid to promote its decentralized governance efforts, especially for the platform’s non-custodial lending protocol. The new token was announced in a detailed blog post on 26th February. Named COMP, the Compound governance token will give freedom to its owners to contribute freely to the suggested changes related to Compound without any need to involve the core team.
By giving more freedom to the users, Compound COMP token has shown its commitment to the DeFi principles. Compound chief executive officer Robert Leshner stated that the token’s primary aim is not to raise funds but to promote decentralized governance. It is meant to empower the community and to promote collective governance. The Compound COMP token won’t be available to the public before completing its decentralization process.
Compound COMP token aims to bring the community together
Compound has been a fairly successful platform. As per DeFi Pulse data, it has a total of $934.3Million in total assets, out of which $146.8 Million are in locked value. Last year, prominent crypto investors helped it raise $25 Million.
Leshner states that a gradual decentralization process will help set the tone for the project. Initially, the project will undergo a ‘Sandbox’ period where some Compound COMP tokens will be given to the shareholders. These token holders can delegate the voting weight amongst themselves or the general public as per their wish. However, most of the Compound COMP tokens won’t participate in governance and will be under escrow.
Compound COMP tokens are a commitment to DeFi
Compound developers also actively participate in governance efforts. However, during the sandbox period, the core team will have the power to suspend the governance. In case the governance system performs amicably as intended, the failsafe can be repealed, and Compound protocol users will receive the remaining tokens. It must be stated that the team cannot suspend the 2-day time-lock under any condition.
A governance proposal can be submitted by a user who possesses one percent of the COMP tokens. Leshner mentions governance examples such as the inclusion of a new asset or interest rate amendments. Proposals will happen via an executable code, making it inherent.
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