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[PUBLIC] Gauntlet Compound Governance Notes

Introduction

In a previous document ([PUBLIC] Compound vesting specification), we discussed the need to incentivise long-term governance (as opposed to yield farming purely for profit) and outlined a possible implementation of vesting that would achieve this objective. While equity vesting is used outside of crypto as a reliable long-term employee incentive, the crypto implementation introduced several challenges that could lead to a difficult trade-off for governance to make:

• Increased gas costs for all Compound users
• Increased Comptroller contract size
• Increased contract complexity
• Potential for vesting events to create COMP liquidity spikes

We propose an alternative approach to incentivising long-term COMP ownership called "gasless cooldown" that limits the ability of Compound users to claim COMP above a certain frequency.

High-level description

For the purposes of explaining the current implementation, we will start with several naive versions, propose attacks and then change the scheme to protect against those attacks.

Lock & unlock cooldown

Protocols such as Aave have introduced a double claim cooldown system where in order to claim tokens you first have to lock them to gain the privilege of unlocking the same amount after a given cooldown period. In practice, this would mean introducing an additional function, say lockComp that would make certain amount of COMP available for claiming, which could then be claimed by claimComp.

There are two downsides for users:

• Users now have to complete two claims instead of one
• A long-term holder could not immediately get access to their COMP holdings, instead having to explicitly lock & unlock them. This would encourage some users to claim more regularly in order to have some COMP available in more liquid form (in case they need to sell it)