Compound votes on treasury delays and veto powers as DeFi governance strains

Compound’s COMP holders are voting on Proposal 612, which would extend treasury withdrawal delays from two days to ten and give the protocol’s Governor Timelock power to cancel treasury transactions before they execute. The voting opened on Sunday and will close on Wednesday (October 7), according to the proposal page.

Though the changes may seem technical in nature, the major concern is actually who would take charge of Compound’s treasury. The voting also leads to a much bigger question in DeFi: How much control can be added to a protocol before the better protection begins to indicate centralization?

What Proposal 612 changes

Proposal 612, submitted by delegate Ugur Mersin on October 2, increases the Treasury Escrow withdrawal cooldown and the minimum delay of the Treasury Timelock from 2 to 10 days. Furthermore, it establishes the period for Escrow expiration at 17 days, which means that there is a 7-day withdrawal period after the cooldown.

The proposal says that two of the five actions will assign EXECUTOR_ROLE and CANCELLER_ROLE to the Governor Timelock in relation to the Treasury Timelock. This means that governance can prevent the treasury from performing any operations rather than just reacting after the fact.

According to the latest vote count, there are 1.75 million votes in favor of the proposal, compared to 921,000 votes against it, far beyond the quorum of 400,000.

The reserve movements that prompted the vote

The proposal refers to actions by Compound’s treasury on September 29. The Treasury Management Committee transferred around $3 million in stablecoins to a separate Safe, which then used $2 million in USDC in a single-sided Uniswap V3 COMP position. Advocates of Proposal 612 claim that the incident demonstrates the need for an enforceable pause in governance, not just a voluntary request.

The conflict existed before the action was taken. Cryptopolitan reported that a delegate has made allegations against the Compound Foundation of converting the amount of 8.42 million DAI stored in the DAO reserves into 344,780 COMP. The delegate also claimed that the resulting voting power was used to influence treasury control and a $52 million V4 program. It is stated that the COMP was subsequently sent back to its Safe 58 minutes prior to the closing of votes for Proposals 580 and 582.

A dilemma bigger than Compound

Stronger controls may reassure users and institutions. Compound has already approved a $52 million development budget as it pushes further into institutional markets.

But clearer intervention powers also raise an old DeFi concern: who really has control? A 2025 ACM study found governance problems were widespread across DeFi projects, while Galaxy Research has highlighted how governance failures can lead to losses and forced liquidations.

Regulators are watching the same fault lines. Chainalysis’ summary of the FATF framework says authorities examine whether anyone exercises “control or sufficient influence”, including through governance concentration and treasury control.

DeFi lending’s shrinking backdrop

Compound is making these changes in a weaker lending market. Galaxy found DeFi lending-app loans fell 27.61% to $20.43 billion in Q2 2026, while overall crypto-collateralized lending declined 16.78% to $56.16 billion.

Proposal 612 is therefore more than a treasury tweak. It is a test of whether DeFi can make governance more enforceable without weakening the decentralization it is meant to protect.