Should Compound Contribute to the DeFi United Recovery Effort?

Co-authored by Compound Foundation and CGWG

Background

Following the rsETH incident, leading DeFi protocols and ecosystem participants have organized under the DeFi United initiative to coordinate a recovery effort aimed at restoring rsETH backing. As of this Snapshot, the initiative has seen over $300M in confirmed and pending commitments, with major participants including Consensys, Aave DAO, Arbitrum DAO, Mantle, Stani Kulechov, Kelp, Lido, Ether.Fi, and others.

The forum proposal published on April 27 (linked here) outlines a potential Compound contribution structured in two parts:

• Part A: approximately 1,857 ETH that may be satisfied through recovery of the attacker's position on Compound, contingent on restoration of rsETH backing. If recovery is not achieved, this portion does not materialize.
• Part B: any additional discretionary contribution beyond Part A, within an authorized range up to a 3,000 ETH ceiling.

The forum post surfaced substantive delegate feedback on both the principle of contribution and the appropriate sizing. To ensure the DAO drives the final outcome, this decision is being guided by two sequential Snapshots.

Purpose of First Snapshot

This Snapshot is a binary pulse check on whether Compound DAO should contribute to the DeFi United recovery effort at all. It does not authorize a specific amount, source funds, or release any treasury. Those execution choices will be addressed in Snapshot 2, the structure of which will be calibrated to the outcome here.

A "Yes" vote signals delegate support for participation in DeFi United, in principle, subject to the Conditions to Contribution set out in the forum proposal. A "No" vote signals that Compound DAO should not participate in the initiative.

Conditions to Contribution

Any contribution authorized through Snapshot 2 and any subsequent onchain proposal would remain strictly conditional on the following, as set out in the forum proposal:

• Full Backing Condition: rsETH is reasonably expected, based on the agreed Recovery Plan, to be fully re-collateralised such that the backing shortfall is fully addressed.
• Fair Treatment Condition: recovery funds are applied in a manner that is neutral, proportionate, and non-discriminatory across affected protocols, platforms, and users.
• Defined Plan Condition: a clear and technically executable Recovery Plan has been specified publicly.
• Governance Visibility Condition: sufficient information regarding the Recovery Plan and intended use of funds has been made available to enable informed assessment.
• Execution Determination: any final contribution amount is determined by the designated execution group following assessment of the conditions above.

Compound reserves the right not to release funds if these conditions are not satisfied, including releasing a lower amount or no incremental amount at all.

Why a Yes/No Snapshot First

The DeFi United landscape is moving daily. Confirmed commitments, pending governance votes from peer DAOs, and the gap between coalition totals and the recovery requirement are all live variables.

Decoupling the principle question ("should Compound participate?") from the execution question ("at what size and from what source?") lets the DAO commit on direction without locking in an amount prematurely. This sentiment has been posited by multiple delegates over the past handful of days.

Snapshot 2 (if required) will follow at a future date and present specific execution choices/amounts for the DAO calibrated to the outcome of this first Snapshot and the state of the Recovery Plan at that time.

Vote Options

• Yes: Compound should contribute to the DeFi United recovery effort, subject to the Conditions to Contribution, and a subsequent Snapshot vote.
• No: Compound should not contribute to the DeFi United recovery effort.
• Abstain

Note: This vote will pass if "Yes" votes reach at least 400,000 COMP and outnumber the "No" votes; else, the vote fails. Delegates will have 72 hours to vote on this proposal, concluding at 5:15pm ET on May 2, 2026.