Summary

Institutional Comet has had a strong launch, and I want to start by congratulating the Foundation, TMC and everyone involved in getting it live.

I support the direction of the product and want to see it succeed.

There is, however, a fundamental governance issue that I believe COMP holders need to formally resolve.

Institutional Comet currently operates under administrative and upgrade permissions that Compound Governance cannot ultimately revoke without the cooperation of the parties holding those permissions.

I have not been able to find any prior governance approval authorizing such an arrangement.

This proposal does not seek to remove the Foundation, TMC, existing Safes or other service providers from the day-to-day operation of Institutional Comet.

They may retain the operational permissions necessary to run and develop the market.

The requirement is simply that Compound Governance must ultimately retain the ability to replace or revoke delegated authority through a valid governance decision, without requiring the consent or signatures of the operators being replaced.

---

Why this matters

COMP does not have many functions today.

Its primary purpose is governance.

If DAO-funded Compound markets can be deployed under a structure where ultimate control sits outside Compound Governance, without explicit authorization from COMP holders and without governance retaining the ability to revoke that authority, it becomes difficult to explain what Compound Governance ultimately governs.

Operational flexibility does not require this.

The existing operators can retain substantially the same permissions and flexibility they have today while those permissions sit behind an architecture ultimately controlled by Compound Governance.

The distinction is simple:

The operators can run the market. Compound Governance should control who is allowed to operate it.

This is particularly important as V4 continues development.

Approval to fund and develop Institutional Comet and V4 should not be interpreted as approval to relinquish ultimate governance authority unless COMP holders explicitly make that decision.

---

Governance Resolution

By voting FOR this proposal, Compound Governance resolves the following:

1. Prior approvals did not authorize irrevocable delegation

Compound Governance hereby confirms that its prior approvals relating to the funding, development and operation of Institutional Comet and the V4 program did not authorize an irrevocable delegation of ultimate governance authority outside Compound Governance unless such delegation was expressly approved by Compound Governance.

2. Ultimate authority must remain revocable by Compound Governance

DAO-funded Compound markets may delegate operational authority to the Foundation, TMC, service providers, Safes or other parties.

However, Compound Governance must ultimately retain the ability to revoke or replace those operators through a valid governance decision without requiring their consent or signatures.

3. Institutional Comet must transition to this structure

Institutional Comet must transition to a security-reviewed control architecture satisfying this requirement within 60 calendar days following passage of this proposal.

This does not require day-to-day administration to move to the Compound Timelock.

The existing operators may retain the operational permissions necessary to run and develop the market efficiently.

The required outcome is that a valid Compound Governance proposal can ultimately revoke or replace delegated operators without requiring the cooperation of those operators.

One possible implementation would place the relevant administrative permissions behind a controller ultimately owned by the Compound Timelock, while allowing the existing Safes to retain delegated operational permissions through that controller.

The exact technical implementation is deliberately left open and should be determined together with the relevant security providers.

4. Implementation plan

Within 10 business days following passage of this proposal, the Foundation and current administrators are requested to publish:

• the complete current permissions structure of Institutional Comet;
• the proposed architecture through which Compound Governance will obtain ultimate revocation authority;
• the operational permissions that will remain delegated;
• the technical and security work required to implement the change; and
• the expected implementation schedule.

5. Extensions require governance approval

If the Foundation or current administrators determine that the transition cannot safely be completed within 60 calendar days, they should return to Compound Governance before the deadline with:

• the specific technical or security reason;
• the work completed to date;
• the remaining work; and
• a proposed extension.

Any extension should be approved by Compound Governance rather than unilaterally determined by the parties whose authority is being made revocable.

---

Existing governance safeguards

This proposal does not remove or weaken Compound's existing protections against malicious governance.

The Proposal Guardian mechanism remains available to the Community Multisig to cancel governance proposals before execution.

A governance-controlled revocation path would therefore still sit behind Compound's existing voting process, Timelock and Proposal Guardian safeguards.

The objective is not to make Institutional Comet vulnerable to an unchecked governance takeover.

It is to ensure that those safeguards do not also result in legitimate Compound Governance being unable to exercise ultimate control over a Compound market.

---

Meaning of the vote

FOR — Institutional Comet must transition within 60 calendar days to a security-reviewed architecture in which Compound Governance can ultimately revoke or replace delegated operators without requiring their consent or signatures. Existing operators may retain delegated day-to-day authority.

AGAINST — Do not require Institutional Comet's current control structure to become revocable by Compound Governance.

ABSTAIN — No position.

---

Conclusion

Institutional Comet has had a strong launch, and nothing in this proposal is intended to interfere with its continued growth or the team's ability to operate it efficiently.

This proposal establishes one principle:

Compound Governance may delegate control. Compound Governance must retain the ability to revoke that delegation.

Funding development is not consent to surrender control.

If COMP is the governance token of Compound, ultimate control over DAO-funded Compound markets should ultimately remain with COMP governance.