Compound V4 fight widens over $8 million reserve transfer

Two Compound forum posts are now running in parallel — one challenging who actually originated Compound V4, the other demanding answers about what happened to the protocol’s V2 reserves.

The V4 origin claim starts with dates. A community Temperature Check for Compound V4 went up on February 16, 2025. The Compound Foundation published its own V4 proposal on January 5, 2026, and followed that with a request for $52 million: $28 million for operations, $24 million for growth and incentives. The proposal would release $14 million upfront and park $38 million in a program reserve wallet.

The forum post’s author argues the Foundation moved in after blocking the original effort. “The controllers of the Compound DAO, principally its founders and collaborators such as Gauntlet, appropriated the concept for Compound V4 from the Compound community after effectively preventing the original community proposal from advancing,” the author wrote on the forum. The post goes further, arguing that parties capable of effectively preventing a community-originated initiative from advancing declined to participate in that governance process, subsequently advanced their own Compound V4 initiative, and then sought authorization to direct tens of millions of dollars of “DAO” resources toward implementing it.

That’s the branding dispute. The money trail is documented separately.

The reserve accountability post records the V2 reserve multisig sending roughly $8 million USDC to one recipient in April 2026. On April 14, the multisig’s COMP voting power was delegated to the Foundation. Then, on May 5, the Foundation received 344,780 COMP — lifting its voting balance from approximately 567,937 COMP to 912,717 COMP, a 60.7% increase.

The timing is the allegation.

On May 20, 100,000 COMP left the V2 reserve multisig and went to the same recipient used in the April USDC transfers. The following day, that 100,000 COMP moved again — to an address that subsequently sent funds to addresses identified as Binance and Bybit deposit accounts.

Worth noting on the numbers: the approximately $8 million USDC figure has a paper trail. The 8.42 million DAI figure cited elsewhere in the broader dispute does not — no exchange rate, no transaction-level conversion, no basis for the translation appears in the record reviewed here.

According to the accountability post, it authorized transferring the full reserves and acquiring COMP for rewards and governance execution. A March report described stablecoin yield and replenishing rewards. The post’s author argues that none of that expressly permitted delegating acquired COMP to the Foundation or deploying it to support the Foundation’s own funding requests. “The Foundation did not finance this COMP position with its own capital. The DAO gave it funds, which it misappropriated,” the author wrote on the forum. The same post calls the situation “an ongoing raid on DAO assets and governance power.”

The governance arithmetic makes the stakes concrete. The Foundation’s voting balance grew by 344,780 COMP, or 60.7% relative to its prior position. Any future vote over the $52 million V4 program would proceed with that same unresolved question sitting underneath it — who authorized using V2 reserves to build the voting power now being used to ratify Foundation proposals.

The response pattern on the forum drew scrutiny of its own. Supportive posts followed the Foundation’s statement from Arana Digital at roughly 25 minutes, PGov at 37, Allthecolors at 42, Tané at 48, and Curia at 77. The accountability post flagged the clustering and asked whether the Foundation had shared its position with those delegates beforehand. The public record doesn’t answer that.