COMP is the native token of the lending protocol Compound and has lost more than 6% value recently. This decline is due to a possible “governance attack” faced by the Decentralized Autonomous Organization (DAO) that manages the protocol.

A governance attack is when an attacker gains significant voting power in the DAO and manipulates the protocol for personal gain. Such attacks are carried out with the aim of influencing the decision-making processes of the protocol by taking advantage of the permissioned and tradable nature of governance tokens.

According to posts on Compound’s forums, the governance attack was carried out by a whale named Humpy on Compound. This whale conducted a series of coordinated efforts aimed at allocating $24 million worth of COMP to a yield-generating protocol called goldCOMP, controlled by a group known as the Golden Boys. These efforts have aimed to manipulate the platform’s decision-making processes through significant COMP token delegations.

The group called Golden Boys attempted several times during this attack. Their first initiative began with Proposition 118 in early May. This proposal envisaged transferring 5% of COMP’s treasury to a multi-signature wallet controlled by the Golden Boys. However, the proposal did not pass as community members highlighted the questionable circumstances surrounding this proposal.

After that failure, the group tried again with Proposition 247, which included a similar approach. Proposition 247 called for 5% of COMP tokens to be deposited into the goldCOMP vault, and these investments would provide passive income to COMP holders. However, this proposal was canceled as it could not obtain the required majority.

Eventually, the group made another attempt with Proposition 289, which passed successfully. This proposal is considered the result of several strategic moves made by Humpy and Golden Boys over a long period of time to direct COMP tokens.

Some observers suggested that these developments were an attempt by Humpy and the Golden Boys to steal funds. However, Humpy disputed these claims, stating that the last GoldCOMP fund used “a Trust Establishment with an action restriction that prevents theft/diversion of funds.” This statement argues that the transactions made are transparent and secure.

In response to the Golden Boys’ proposal, the community submitted a proposal to limit what they could do. Proposition 290 will be up for votes in just over a day.

This proposal aims to transfer a smart contract called Timelock Admin and require a two-day delay before governance actions are implemented. Thus, the community will have more reaction time and a more effective defense mechanism can be created against future governance attacks.

However, there is no definitive information on whether this measure will move the COMP tokens that the Golden Boys are targeting. This situation creates uncertainties about what direction the future movements of the tokens will take.