With a TVL of over $2B, Compound Finance needed a reliable solution to engage their entire community in governance without compromising on security. The solution was tailor-made alerts by OpenZeppelin.
User trust is paramount in DeFi, and security is crucial for investors. Compound Finance, a leading Ethereum lending protocol and Decentralized Autonomous Organization (DAO) partnered with OpenZeppelin to implement customized real-time monitoring, streamlining their governance process, increasing security and boosting user confidence.
Strengthening Security with Real-Time Monitoring
In the DeFi ecosystem, Compound sees thousands of daily transactions. However, the openness of this marketplace also poses challenges in identifying and addressing potential issues that could have a catastrophic impact on the protocol, such as a governance takeover. A delicate balance must be struck between promptly flagging concerns and avoiding overreactions that may lead to confusion within the voting and governance processes. Moving quickly to address issues in a decentralized ecosystem is paramount to ensuring the security of the protocol, community and assets locked.
Dedicated Notification Channels Separate Signal from Noise
In traditional finance, KYC methods vouch for customer integrity, but DeFi requires different protections for users and communities to safely interact with these protocols. Enter advanced security monitoring through OpenZeppelin Defender – the missing puzzle piece. Tailor-made monitors act as watchdogs, scrutinizing every transaction against predefined custom parameters, searching for anomalies and changes in end-user behavior.
For example, suppose an account acquires enough governance tokens to make a proposal submission or pass quorum on its own. In that case, OpenZeppelin instantly triggers a notification, rallying the community on the DAO’s official Discord to analyze and respond if necessary. There, anyone can inspect alerts and take swift action such as collaborating in-channel or submitting a governance proposal to mitigate any oncoming attacks. The presence of these monitors has led to a boost in user awareness and participation in governance.
As Compound’s trusted security solutions provider, OpenZeppelin delivered a full suite of notification feeds. To supercharge Compound Finance’s risk management, OpenZeppelin leveraged the capabilities of the decentralized security network Forta to build custom machine-learning powered monitors covering governance, access control, listed assets, oracle feeds, and attack vectors, which were fine-tuned to the protocol and community’s needs.
Automating Proposal Execution to Streamline Administration
Although DeFi flows nonstop, protocol teams can’t be available 100% of the time. After a proposal gets voted on and approved, it hits an obligatory security-induced delay. Only when that countdown ends can the proposal go live on the blockchain. Compound faced a predicament: proposals were stuck in limbo until developers across global timezones manually triggered execution. To solve this pain point, OpenZeppelin provided a repeatable automation capability for that process, speeding the time to proposal execution by 20%. Now, timelocked proposals execute seamlessly, delivering speed and efficiency without risking security.
Empowering Decentralized Communities
OpenZeppelin’s real-time monitoring integrates seamlessly with smart contracts and provides customizable notifications through email, Slack, Telegram, Discord, or Datadog. This empowers decentralized communities to navigate threats, maintain transparency, and respond effectively to potential security issues.
OpenZeppelin’s partnership with Compound DAO has enhanced governance efficiency, improved security, and fostered transparency. For DAOs and crypto protocols seeking to bolster security and community engagement, contact us today to elevate your protocol's security and governance capabilities.
