The Proposal Unfolded
A new governance initiative by Gauntlet founder Tarun Chitra has hit the Compound ecosystem like a surprise party you didn’t know you were invited to. Submitted on a quiet Wednesday, this proposal seeks to implement a vesting schedule for all future COMP token distributions, meaning that your token rewards could be temporarily on probation before they’re sent into your wallet.
How Vesting Works – Discrete vs. Continuous
Chitra lays out two potential pathways for vesting: one, the traditional discrete vesting where tokens can be claimed at fixed intervals, like an old-school paycheck; and the other, a sleek, modern version known as continuous vesting that gradually releases tokens as they mature. Think of it as the adulting of tokens—the tokens grow up and can finally leave the nest at varying rates, rather than flying the coop instantaneously.
Rethinking Instant Gratification
Currently, the COMP distribution model is wide open with a vesting time that’s effectively nonexistent. Yield farmers can deploy their resources, accumulate COMP, and bail out quicker than you can say ‘blockchain’. This rapid flipping creates a messy vibe in the governance garden, as the original intent—distributing ownership to users—is apparently hijacked by profit-hungry whales.
The Ripple Effect on DeFi
If the vesting proposal passes, it could reshape the DeFi landscape like a game of Jenga. Companies that live off yield farming will face the haunting specter of diminished short-term capital. Compound Labs CEO Robert Leshner has already dubbed these swift traders “purely capitalist yield farmers,” who may just hightail it out of Compound. Given that Compound has a substantial amount of DAI, its connections to MakerDAO complicate this even further.
A Blessing and a Curse?
Imagine tightening your grip on a hose—less water pressure means less chaos, but it also means your plants might not get the water they need. While a tighter vesting approach could counteract the immediate sell-off pressure and stabilize token prices in the long run, it might also pull the plug on liquidity mining revenues. In a world that watches Total Value Locked (TVL) like a hawk, a dip in liquidity could raise eyebrows and impact token valuation. It’s a classic case of ‘give and take’ in the ever-evolving DeFi narrative.
