## Summary

As [Robert Leshner mentioned in his forum post]([https://compound.finance/governance](https://compound.finance/governance)), the community now has the power to control COMP distribution across markets after [Gauntlet's recent proposal (#33)](https://compound.finance/governance/proposals/33). This will allow the protocol to better and more efficiently manage how COMP is used to improve and further the protocol's interests. Given that the initial COMP distribution numbers were set somewhat arbitrarily, it has become clear that it is worth resetting the parameters based on usage over the last six months. The refreshed numbers proposed will be used for A/B testing optimal COMP emission quantities in future proposals.

In a [comp.xyz forum post]([https://www.comp.xyz/t/comp-distribution-speeds/899/11](https://www.comp.xyz/t/comp-distribution-speeds/899/11)), Robert and Sirokko have put forth reasonable suggestions that we believe would improve upon the existing values. Both of their values for COMP distribution were quite similar and we chose Sirokko's numbers for two reasons:
1. All markets are given a fixed quantity (10% of rewards spread evenly across the 9 active markets) of COMP rewards
2. Splitting each market's COMP rewards into a fixed quantity (common to all markets) and a variable quantity makes it easy to analyze improvements in future A/B tests for incentives

Please read the forum post for more details.

## Acknowledgments
- Robert Leshner: For starting the discussion and putting out the first distribution numbers
- Sirokko: For providing a coherent methodology for this refresh
- Hsien-Tang Kao: For analyzing 1-step recursive borrowing in existing markets

## References
- [Forum post](https://www.comp.xyz/t/comp-distribution-speeds/899/21)

COMP Speed Recalibration

When the DSR (Dai Savings Rate) was introduced by MakerDAO, the Compound team developed a [CDaiDelegate](https://github.com/compound-finance/compound-protocol/blob/master/contracts/CDaiDelegate.sol) to take advantage of DSR (pre governance). With DSR remaining at 0% for an extended period of time, it would be advantageous for the sake of gas fees to change back to an implementation which doesn’t deposit to DSR.

I propose setting the cDai implementation to the [CErc20Delegate](https://etherscan.io/address/0x976aa93ca5aaa569109f4267589c619a097f001d#code) which is already the implementation for cUSDT and setting the interest rate model for cDai to [that of cUSDT](https://etherscan.io/address/0xFB564da37B41b2F6B6EDcc3e56FbF523bD9F2012#code). The interest rate model change is necessary because the current IRM takes DSR into account. The actual interest parameters (base rate, multiplier, jump multiplier, and kink) will remain the same.

The end result of this proposal will be gas savings for users. This proposal has been simulated on a network fork to ensure expected outcome and uses contracts which have already been part of the Compound ecosystem for a long time. For more information, please see [this post](https://www.comp.xyz/t/migrate-cdai-implementation-from-cdaidelegate-to-cerc20delegate/807) on the Compound forums.

Semi-Permanent Gas Saving Measures for the DAI Market

## Summary
In order to reduce the size of the `Comptroller` for both vesting updates and future changes, this proposal contains a number of size and gas optimizations. Currently, there is not enough space in the `Comptroller` for vesting changes, which is the main impetus for this proposal. We split this out from the remainder of the vesting changes, as these changes provide protocol users with some more immediate gas benefits. An itemized summary of the changes is as follows:
1. This proposal removes automatic COMP claims for users and also removes automatic COMP speed refresh, replacing it with `_setCompSpeed` , controlled by governance
2. Implements several related small changes related to the above to further optimize the Comptroller contract and reduce gas costs for users.
Please note that this patch is **not** in itself making any immediate COMP speed adjustment, it is simply removing some redundant speed change functions and giving governance more direct control.

## References
- [Audit, by QuantStamp](https://certificate.quantstamp.com/full/compound-protocol) (please note that some of the code has changed since the audit, see PR for more details) 
- [Pull Request on GitHub](https://github.com/compound-finance/compound-protocol/pull/83)
- [Forum post](https://www.comp.xyz/t/comptroller-optimizations-to-enable-vesting/845)

Remove automatic COMP claims and COMP speed refresh

**Background:**

COMP distribution to users began on June 15, 2020, and has since distributed ~450K COMP, with approximately 4MM COMP remaining.

Behind the scenes, the distribution works through two main contracts, the [Reservoir](https://etherscan.io/address/0x2775b1c75658be0f640272ccb8c72ac986009e38), and the [Comptroller](https://etherscan.io/address/0x3d9819210a31b4961b30ef54be2aed79b9c9cd3b). The `Reservoir` is an immutable contract that exists outside the control of governance and drips 0.50 COMP per block into the `Comptroller` contract. The Reservoir continuously adds COMP at the drip rate and is independent of the rate at which the Comptroller distributes such COMP. The Comptroller contract controls the usage and distribution rate of COMP for a number of functions including but not limited to, i) distribution to borrowers and lenders for each market, ii) [building a reserve](https://compound.finance/governance/proposals/21) that can be used for community needs, and iii) voting, among other uses.

Currently, the Comptroller distributes 0.352 COMP/block (70%) on liquidity incentives and accrues the remaining 0.148 COMP/block (30%) as treasury reserves. At the current COMP price of $155, Compound's treasury is growing at a rate of ~$149,000 per day, or $4.5MM per month.

[Gauntlet's prop30](https://compound.finance/governance/proposals/30) added the [ability](https://www.comp.xyz/t/compound-contributor-grants/756) for the Comptroller contract to send COMP to a particular user, group, address, or contract selected by a governance vote. These changes as [described by jmo](https://www.comp.xyz/t/compound-contributor-grants/756), enable a plethora of use cases, including the use of treasury assets to compensate those liquidated in the Thanksgiving Event, as [suggested by mrhen](https://www.comp.xyz/t/dai-liquidation-compensation/684/10).

**Mechanics:**

This proposal uses the `_grantComp` function introduced by Gauntlet to distribute a set quantity of COMP to a [Merkle distributor contract](https://github.com/kybx86/compound/blob/master/compensation_prop/merkle-root/compCompensationMerkleTree.json) that will automatically distribute the corresponding COMP to each of the [wallets](https://github.com/kybx86/compound/blob/master/compensation_prop/generateAddressBalances/addressBalancesDecimal.json) affected—user's don't need to interact with any contract to claim this COMP; After the proposal's execution, the relayer will claim COMP for each wallet according to the Merkle distributor and distribute it.

To calculate the amount of COMP needed from the Comptroller for the compensation, this proposal uses the 14-day average closing price of COMP from [CoinMarketCap](https://coinmarketcap.com/currencies/compound/historical-data/) as of the time of writing (12/8/20) to compensate users 8% of the liquidated amount.

As an illustrative example, if a wallet had 100 DAI repaid by a liquidator, then that wallet would receive 8 DAI worth of COMP, which equates to 0.064 COMP of compensation (using a 14-day average COMP price of $123.39).

**Distributor Methodology**

Referencing the DAI liquidations [spreadsheet](https://docs.google.com/spreadsheets/d/1ozVGA7mwn-xFQb1oAKsNczMRL-Dj9JgG_0UXH2IQ1s8/edit#gid=0) published by [rleshner](https://twitter.com/rleshner), a total of 85,220,406.43 DAI was repaid on 11/26/20. Applying the 8% liquidation penalty, this proposal would pay out a total of 6,817,632.51 DAI (in COMP). Taking the 6,817,632.51 DAI and dividing by $123.39 (the 14-day average price of COMP) equals 55,254.95 COMP distributed to users.

- To view the detailed math breakdown, [see here](https://aws1.discourse-cdn.com/standard17/uploads/compoundcommunity/original/1X/6385f4950b0adcf89edc3178f7248c181908fb71.png).
- To preview the COMP distribution per address, [see here](https://github.com/kybx86/compound/blob/master/compensation_prop/generateAddressBalances/addressBalancesDecimal.json).

Overall, this distribution of COMP represents only 0.55% of the fully diluted COMP 10M supply and less than 2% of the 24hr COMP volume traded globally, suggesting minimal market impact. Additionally, assuming the Comptroller earns 962 COMP per day, the 55k COMP distribution will be replenished in less than 60 days.

**Next steps:**
If you support this proposal, you can delegate COMP to this autonomous proposal.

**Disclosure:**
For full transparency, I was one of the 121 Compound users affected in the DAI liquidation event. I recently worked with the community to pass a [reserve factor change](https://www.comp.xyz/t/increase-dai-reserve-factor-from-5-to-15/765/3) to the DAI market to de-risk it and prevent repeat events.

**Resources:**
To view the full forum post, [see here](https://www.comp.xyz/t/compensation-proposal/801).

Distribute COMP to Affected Users in the DAI Liquidations

[Reserve Factor](https://compound.finance/docs/ctokens#reserve-factor) was changed several times to mitigate market risks; it is time to adjust them to the current market.

### What is Reserve Factor?
The [Reserve Factor](https://compound.finance/docs/ctokens#reserve-factor) is a percentage of the borrowers paid interest which can be used by the governance or act as an insurance against borrower default which protects all the suppliers.

Increased [Reserve Factor](https://compound.finance/docs/ctokens#reserve-factor)
+ USDC 5% to 7.5%
+ DAI 5% to 15%
+ ETH 10% to 20%
+ WBTC 10% to 20%
+ UNI 20% to 25%
+ COMP 20% to 25%

Decreased [Reserve Factor](https://compound.finance/docs/ctokens#reserve-factor)
+ USDT 20% to 7.5%
+ BAT 50% to 25%
+ ZRX 50% to 25%


This proposal includes a community member [Autonomous Proposal](https://compound.finance/governance/address/0x5576a4db81a44cb7158fc8d5ae752cb44f57be76) that explains the DAI market risk.

Reference Links

[Reserve Factor Standardization](https://www.comp.xyz/t/reserve-factor-standardization/608)

[Dai Market Risk](https://www.comp.xyz/t/dai-market-risk/688)

[Increase DAI Reserve Factor from 5% to 15%](https://www.comp.xyz/t/increase-dai-reserve-factor-from-5-to-15/765)

Adjusting Reserve Factors

## Summary

The [Compound Comptroller contract](https://etherscan.io/address/0x3d9819210a31b4961b30ef54be2aed79b9c9cd3b) has a reserve of of over 100,000 COMP and growing. This proposal adds the ability for the Compound protocol to send this COMP to a particular user or group, selected by a governance vote. The functionality has two components:
1. `_grantComp`: An ability for Governance to pay a particular amount of COMP to a specific address
2. `_setContributorCompSpeed`: An ability for Goverance to _stream_ a grant to a participant.
An in-depth description of the changes can be found in [this forum post](https://www.comp.xyz/t/compound-contributor-grants/756) and the linked documents. We're looking forward to continuing the conversation on the forums.
Besides adding this functionality, we also:
1. Remove code from the Comptroller to reduce its size (making room for the changes mentioned above)
2. Award ourselves a COMP grant (1000 COMP) to offset development and audit costs.

## References
* [comp.xyz Forum post](https://www.comp.xyz/t/compound-contributor-grants/756)
* [Audit, by Quantstamp](https://certificate.quantstamp.com/full/compound-protocol)
* [Development Specification](https://www.notion.so/PUBLIC-Compound-vesting-specification-b52d1c6b3bc24f53b693ebe88d0c836f)
* [Pull request on Github](https://github.com/compound-finance/compound-protocol/pull/79)

COMP Contributor Grants

Proposal 28 was canceled due to an accidental drop in the proposer's delegations. This proposal is a new version of proposal 28.

This proposal acts to delegate the cUNI market liquidity to the community multisig. The community multisig will vote according to the consensus reached by cUNI holders but reserves the right to disqualify any manipulation used to gain an advantage in off-chain voting. Additionally, if a 10% quorum is not reached, the multisig will not vote. View [this discussion](https://www.comp.xyz/t/setup-community-cuni-voting/440) for more context. Off-chain voting will occur [here](https://cuni.comp.vote).

The last two calls distribute a bounty of $1200 worth of SAI from reserves to Arr00 for setting up the cUNI voting system.

The Multi-Sig requires 4-of-6 signers to approve any transaction. The signer addresses can be seen [here on Gnosis Safe](https://gnosis-safe.io/app/#/safes/0xbbf3f1421D886E9b2c5D716B5192aC998af2012c/settings), and currently include @aaaaaaaaaaaaa, @arr00, @blck, Compound Labs, Dharma Labs (@0age), and @jared. For full context and history on the Multi-Sig, please see [this post](https://www.comp.xyz/t/community-multisig-4-of-6-deployment/134) on the Compound Community Forum.

Delegate UNI 2

This proposal delegates the cUNI market liquidity to the community multisig. The community multisig will vote in Uniswap proposals according to the will of the cUNI holders, expressed through off-chain voting conducted [here](http://cuni.comp.vote). The multisig reserves the right to disqualify any manipulation used to gain an advantage in off-chain voting and will only vote if a 10% quorum is reached. Read the [discussion](https://www.comp.xyz/t/setup-community-cuni-voting/440) for more context.

The last two calls distribute a bounty of $1200 worth of SAI from reserves to Arr00 for setting up the cUNI voting system.

The Multi-Sig requires 4-of-6 signers to approve any transaction. The signer addresses can be seen [here on Gnosis Safe](https://gnosis-safe.io/app/#/safes/0xbbf3f1421D886E9b2c5D716B5192aC998af2012c/settings), and currently include @aaaaaaaaaaaaa, @arr00, @blck, Compound Labs, Dharma Labs (@0age), and @jared. For full context and history on the Multi-Sig, please see [this post](https://www.comp.xyz/t/community-multisig-4-of-6-deployment/134) on the Compound Community Forum.

Delegate UNI

This proposal adds Compound as a supported asset.

The cCOMP contract was deployed using existing, proven code. The implementation contract is the same contract as the cUNI implementation contract.

cCOMP uses a new [JumpRateModelV2](https://etherscan.io/address/0xd956188795ca6f4a74092ddca33e0ea4ca3a1395) interest rate model with the following parameters:
- 2% APY borrow base rate
- 20% APY borrow rate at kink
- Kink at 80% utilization
- 100% APY borrow rate at 100% utilization

The collateral factor for cCOMP is set to 60% and the reserve factor is set to 20%. A borrowing cap of 50k COMP is set as well.

[Discussion](https://www.comp.xyz/t/adding-comp-as-an-asset/470)

Add COMP Support

We saw unexpected demand for the Uniswap market and the pre-set Borrowing Cap quickly reached its limit; this proposal increases the borrow cap to 5M UNI and sets the Borrow Cap Guardian to the Community Multi-Sig which allows for rapidly setting new borrow caps if needed (Read about Multi-sig below).

Additionally, this proposal sets a new [interest rate model](https://etherscan.io/address/0xd88B94128Ff2B8Cf2d7886cd1C1E46757418cA2A#code) for cUNI using the following parameters:
- 2% base rate
- 30% borrow rate at kink
- Kink at 80%
- 150% borrow rate at 100% utilization
- Owner is Timelock (0x6d903f6003cca6255D85CcA4D3B5E5146dC33925)
![InterstrateModel](https://i.imgur.com/1qAHoKb.png)


The Multi-Sig requires 4-of-6 signers to approve any transaction. The signer addresses can be seen [here on Gnosis Safe](https://gnosis-safe.io/app/#/safes/0xbbf3f1421D886E9b2c5D716B5192aC998af2012c/settings), and currently include @aaaaaaaaaaaaa, @arr00, @blck, Compound Labs, Dharma Labs (@0age), and @jared. For full context and history on the Multi-Sig, please see [this post](https://www.comp.xyz/t/community-multisig-4-of-6-deployment/134) on the Compound Community Forum.

Vote By Signature

35

Total Proposals

Recent Proposals