Delegation is one of the most powerful mechanisms in decentralized governance. It allows tokenholders to entrust decision-making to individuals or entities with the time, expertise, and incentive to evaluate proposals and act in the protocol’s best interest. In practice, this model helps maintain continuity and efficiency, especially as DAOs grow in scale and complexity.

Still, delegation works only when delegates stay engaged. Idle voting power undermines the democratic intent behind DAO structures. Active participation, on the other hand, helps protocols remain responsive, credible, and operationally sound

Compound’s participation trends and the impact of the Delegate Race

Compound DAO provides a useful case study of how delegation models can evolve. Over the first half of 2024, participation in Compound’s governance steadily declined. The proportion of COMP tokens voting in proposals dropped from about 28% in February to just over 20% by July. Some top delegates were voting in less than half of proposals, with a few participating in fewer than 10%.

To address this, the community launched the Delegate Race and renewed the Governance Working Group (GWG). These initiatives reallocated around 300,000 COMP (worth roughly $13m) from the treasury to a set of active delegates, incentivizing consistent engagement. The impact was immediate. By October, participation rebounded above 28%, and 100% of proposals reached quorum, compared to roughly 8% that had failed before. This data reinforced the idea that structured delegation programs can meaningfully improve DAO engagement when designed with transparency and accountability in mind.

The recall vote

As the Delegate Race matured, it also sparked renewed debate over how governance power should be managed. In September 2025, a new proposal, widely referred to as the “recall” or “clawback” proposal, appeared on-chain, bypassing the usual deliberation phase and seeking to revoke the 300,000 COMP delegated through the program and return those tokens to the treasury. 

Notably, the proposal was introduced without prior discussion on the governance forum and was created immediately after the expiration of the proposal guardian, a safeguard that could have canceled it if deemed harmful. The timing and lack of transparency raised legitimate concerns that the initiative was not a routine governance action but a coordinated attempt to exploit a temporary gap in protocol protections. According to on-chain data, nearly all “for” voters, apart from the newly created address that submitted the proposal, had identifiable links to Humpy or had previously supported his earlier governance attempt, further reinforcing the perception that this was a targeted and organized effort rather than an organic community initiative.

Proponents of the recall argued that the treasury-funded delegation distorted governance by giving additional power to selected delegates rather than those holding tokens outright. They believed that influence should be directly tied to economic stake. Opponents countered that the Delegate Race had proven effective in revitalizing participation and that the recall risked discouraging engagement from committed delegates.

The proposal ultimately failed, with nearly 70% of votes cast against it. For context, Compound proposals require 400,000 COMP to reach quorum. That’s a high bar that typically demands broad participation. Despite one large voter, Humpy, supporting the recall with more than 77,000 COMP, the community, including Wintermute, sided with maintaining the delegation program.

Humpy is a pseudonymous whale, a major player in multiple protocols, previously associated with a controversial governance incident in mid-2024, when a proposal backed by his voting bloc Goldenboys sought to redirect COMP into a separate yield-bearing structure, raising concerns about centralized control. The DAO then managed to strike a truce with Goldenboys to reverse the vote’s execution in exchange for a staking program that would distribute yield to major whales like Humpy. That history made his participation in this vote particularly notable.

The latest clawback proposal refusal showed that DAO governance is not only about the distribution of power but also about sustaining mechanisms that encourage informed participation.

Active delegation as responsibility

Delegation should never be a passive arrangement. Those entrusted with voting power have a duty to assess proposals carefully and act in the long-term interest of the protocol. Consistent participation builds trust and ensures that governance reflects more than just a handful of large holders.

At Wintermute, this philosophy defines our approach. Even during periods when we held little or no delegated voting power, we continued to vigilantly evaluate Compound’s proposals and cast votes. We treat delegation as a responsibility, not a privilege. It’s an obligation to show up, stay informed, and participate constructively.

Wintermute treats governance as a core responsibility, publishing our delegate profiles across multiple protocols to ensure transparency. To date, we have participated in more than 1,800 governance decisions, including 837 on-chain votes and 1,045 off-chain votes, across leading DeFi protocols. When key proposals arise, such as the recent recall vote, we engage not to steer outcomes but to help preserve the integrity of the process. Sustained, active involvement by delegates is what keeps DAOs functioning as legitimate, community-driven systems.

Looking ahead

The Compound episode demonstrated that governance debates, even contentious ones, are signs of health in a DAO, not dysfunction. They show a community willing to challenge assumptions, test mechanisms, and refine how decentralized decision-making should work.

At Wintermute, we view that responsibility as central to our role in the ecosystem. Our commitment extends beyond markets to helping maintain governance systems that are resilient, participatory, and credible, because in DeFi, showing up consistently is what keeps decentralization alive.