The initial objective of the COMP rewards program was to distribute the token to our users. While this was an effective way to kickstart Compound and reward early users, the practice of COMP farming for profit has become very problematic.

Since most COMP being distributed by the current rewards program is instantly sold off, existing users and token holders are at a great disservice. Their share of the protocol is being diluted for nothing other than farming COMP for profit. This COMP farming behavior is not the kind of activity that will bring value to the protocol, or for the existing users and token holders. Incentives need to be used to grow the protocol to the benefit of the protocol itself and its users and token holders.

Going forward, I believe it’s best to end the current COMP rewards program and to start a new one with the sole purpose of kickstarting new markets: kickstart rewards.

This proposal is the second step towards launching the new rewards program - existing rewards are being slashed to 0.

For more information and discussion, please visit the discussion thread on the forums.