A new governance initiative has emerged within the Compound ecosystem following the cancellation of Proposal 613 by the Proposal Guardian on October 7, 2026. The proposal, introduced by forum user ugurmersin, suggests a strategic shift in how the protocol manages its reserve assets. Instead of dissolving the Ecosystem Protection and Continued Fund (EPCF), the community is now considering transferring control of these significant holdings from the Compound Foundation’s private custody to a 5-of-9 community-governed multisig wallet.
Asset Reallocation and Security Enhancements
The proposal targets a substantial volume of liquidity currently held in a separately controlled Safe by the Foundation. The assets slated for migration include 500,000 USDC in liquid capital and approximately 4.58 million USDC currently supplied to the cUSDCv3 market. Furthermore, the plan encompasses the Ethereum (ETH) mainnet Chainlink SVR revenue, which currently totals 355.95 ETH.
A multisig (multi-signature) wallet requires a predefined number of authorized signatories to approve a transaction before it can be executed on the blockchain, reducing the risk of a single point of failure.
The transition to a 5/9 multisig structure is designed to achieve the following:
- Enhance the decentralization of fund management by involving multiple community-vetted signatories.
- Prevent the unilateral closure of the EPCF, ensuring the fund remains available for ecosystem development.
- Increase transparency regarding the utilization of Chainlink SVR revenue.
- Maintain the stability of the cUSDCv3 market by keeping the supplied assets within the protocol.
Governance Context and Rationale
The emergence of this proposal reflects the ongoing evolution of Compound Finance’s decentralized governance model. The previous attempt to address these funds, Proposal 613, was halted, leading to the current demand for a middle-ground solution that prioritizes security without liquidating the treasury. Proponents argue that a community-led multisig provides a more robust check-and-balance system than the current Compound Foundation custody model.
This proposal aims to transfer the EPCF and the mainnet Chainlink SVR revenue from the Compound Foundation's separately controlled Safe to a community multisig requiring 5 out of 9 signatures.
This shift in custody is particularly relevant as DeFi protocols face increasing scrutiny regarding the decentralization of their administrative functions. By distributing signing authority among nine distinct entities, the Compound community aims to mitigate risks associated with centralized control while ensuring the protocol has the resources necessary for long-term sustainability. The proposal remains under discussion on the official community forum as stakeholders weigh the technical requirements of the transfer.
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