Compound Labs, the development group behind the DeFi Compound Finance protocol, is considering launching a specialized platform to optimize operations and promote sustainable protocol development.
In a post on April 1st, Compound Labs noted that establishing a dedicated platform has become common in large DeFi ecosystems. A similar structure for Compound could provide stability, legal transparency, and enhance community cohesion.
Initially, Compound's operating model was quite simple, reflecting the experimental nature of DeFi in its early stages. However, as the platform matured, the lack of a centralized structure made managing critical operations increasingly complex. Despite outsourcing risk assessment services to Gauntlet and security audits to OpenZeppelin, the absence of an official organization continued to create unnecessary obstacles.
The Compound Labs team emphasized:
"With the upcoming development of Compound v4, increasing community participation on forums, the decentralization process of the Compound ecosystem, and Compound Labs gradually reducing its role, we recognize an urgent need for a more stable structure. Therefore, it is time to consider establishing the Compound Foundation."
Following this announcement, the COMP token – Compound Finance's native token – dropped approximately 6% to a low of $42 before slightly recovering to around $45 at the time of writing.
If established, the Compound Foundation would operate independently from Compound Labs and existing organizations, playing a coordinating role and providing strategic guidance for stakeholders. According to Compound Labs, the platform would have a model similar to the Uniswap Foundation, supporting governance, development, and connecting contributing community members.
Before making a final decision, Compound Labs plans to open discussions on community forums to gather feedback.
Disclaimer: The article is for informational purposes only and is not investment advice. Investors should thoroughly research before making decisions. We are not responsible for your investment choices.
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