Tron’s Justin Sun Accused of ‘Governance Attack’ on DeFi Lender Compound

Members of crypto deliberation vessel GFX Labs’ governance part are ringing the alarm bells that a salient ample capitalist whitethorn beryllium attempting to leverage ample sums of superior to manipulate on-chain governance for a decentralized finance (DeFi) protocol.

In a tweet connected Friday, GFX’s Twitter grip called attraction to a monolithic indebtedness of Compound’s governance token, COMP, taken retired by billionaire Justin Sun.

On-chain governance of DeFi protocols is often token-weighted, and portion 1 GFX typical personally characterized the indebtedness arsenic a “governance attack,” determination is thing explicitly prohibiting users from taking retired loans to ballot connected proposals they back.

On-chain information shows that connected Thursday, Sun’s wallet borrowed 99,000 COMP tokens worthy implicit $13 cardinal and aboriginal sent 102,000 tokens to Binance, the world's largest crypto exchange.

On Friday, an code that received $9 cardinal worthy of COMP tokens from Binance proposed adding TUSD arsenic a collateral plus connected Compound, which would let Compound users to instrumentality retired loans against their TUSD holdings.

While it is intolerable to definitively verify that the connection code belongs to Sun, according to pseudonymous GFX Labs contributor PaperImperium, the signifier is reminiscent of a akin ballot that took spot successful stablecoin issuer MakerDAO’s governance successful January.

“Justin borrowed a ample magnitude of MKR from Aave,” PaperImperium said. “Presumably this was to ballot connected a canvass to make a TUSD-DAI Peg Stability Module. After it was noticed, helium returned the MKR earlier voting.”

Creating a stableness module would let users to swap TUSD for MakerDAO’s DAI stablecoin astatine a fixed rate. In the poll, the assemblage voted the connection down earlier it could determination to ceremonial voting.

A TUSD typical wrote successful Maker’s governance forums aft the canvass concluded that they were unaware of Sun’s actions, and that “we wouldn’t hazard moving with Justin Sun, oregon immoderate whales, to manipulate votes.”

Sun is listed arsenic an Asia markets advisor connected TUSD’s website, and a blog station from 2020 notes that “ownership of TUSD volition beryllium moving implicit to an Asia-based consortium that volition beryllium moving with TRON to make TUSD connected Ethereum, TRON and different blockchain networks.”

Other stablecoins person attempted akin gambits successful caller weeks arsenic the request for inferior pushes platforms to leverage “bribe” protocols.

There are dozens of decentralized stablecoins present connected the market, which is mostly dominated by centralized alternatives similar Tether and USDC. Additionally, generating involvement and usage is an uphill conflict if lending protocols, and different DeFi platforms don’t judge deposits.

A increasing fig of services present cater to helping idiosyncratic successful integrations, specified arsenic Bribe, which allows protocols to bribe Aave token holders to ballot definite ways connected proposals.

Protocols similar Abracadabra, the issuers of stablecoin MIM, person considered using Bribe successful an effort to get listed connected Aave, but pursuing a contention with an affiliated project, their efforts present look improbable to pass.