Compound Community Proposes Shift of $5M EPCF and SVR Funds to Community Multisig
TREE NEWS reports: A new governance proposal has been introduced on Compound to transfer custody of the Ecosystem Protection and Continuation Fund (EPCF) and mainnet Chainlink SVR revenues from a Foundation-controlled multisig to a community-owned 5-of-9 multisig. The move comes after Proposal 613—which sought to shut down the EPCF and move funds into a timelock—was canceled by the Proposal Guardian.
The alternative, authored by community member ugurmersin, preserves the EPCF’s original purpose, size, 48-month term, and emergency deployment function, but changes who holds the keys. The assets involved include 500,000 USDC and 4,583,411 USDC deposited in cUSDCv3, plus 355.95 ETH from the mainnet SVR reserve—totaling roughly $5.08 million in USDC and 356 ETH.
Governance and Transparency Concerns
The proposal argues that current custody by two Foundation-nominated addresses lacks withdrawal cooldowns and oversight mechanisms typical of treasury custody. On-chain data reportedly shows the Foundation moved assets to centralized exchanges without disclosing these moves in transparency reports. A 9-member community multisig would provide stronger checks and balances.
This is not the first time Compound’s governance has clashed over fund control. The cancellation of Proposal 613 by the Proposal Guardian—a safety mechanism designed to prevent malicious or harmful proposals—highlights the tension between decentralized governance and operational security. The new proposal attempts a middle path: keep the fund’s mission intact but distribute custody to a broader set of stakeholders.
Implications for DeFi Governance
Compound is one of DeFi’s oldest and most influential lending protocols. How it manages its treasury and emergency funds sets a precedent for other DAOs. The push for a community multisig reflects a broader trend in DeFi: token holders demanding greater transparency and control over protocol-owned assets. If passed, the proposal could reduce counterparty risk and improve trust, but it may also slow emergency response if not designed carefully.
The 5-of-9 threshold aims to balance security with agility. However, the effectiveness depends on signer diversity and operational readiness. The proposal does not specify which nine entities would hold keys, leaving a critical detail to be determined. Without clear signer selection, the community may face another governance battle.
Forward-Looking Perspective
This proposal is a test case for DAO treasury management. As DeFi protocols mature, the line between foundation-led operations and community-led governance will continue to blur. Compound’s decision could influence how other DAOs structure their emergency funds and revenue streams. If the community multisig proves effective, it may become a model for other protocols seeking to decentralize custody without sacrificing stability.
Investors and governance participants should watch for amendments, signer announcements, and the final vote. The outcome will signal whether Compound’s community can coalesce around a compromise—or whether the governance divide deepens.
