DeFi Protocol Compound Loses over $70mln in Tokens Due to Distribution Bug
Compound Finance, a cryptocurrency lending DeFi company, claimed that a supply issue erroneously rewarded customers more than $70 million in its COMP coin. The token disbursement bus is part of Compound Finance’s recently enacted Proposal 062.
Rather to its intended purpose of “splitting COMP awards distribution and bug fixes,” the update has led in over-rewarding providers. Before Compound Finance deployed Proposal 062, the DeFi tech company performed the necessary checks to verify that there were no problems.
Within hours, though, the crew observed an odd behavior. Because of the flaw, some users were able to claim up to $50 million in COMP tokens. COMP’s problem occurrence was presumably caused by the absence of two characters. In two code places, “>” was used instead of “>=.” The defeat resulted from ignoring those two errors.
In response to the incident, Compound Finance stated, “Compound Labs and community members are examining inconsistencies in the COMP allocation.” Furthermore, the Compound Finance group has guaranteed that both provided and borrowed money are secure. The group also stated that it was looking at inconsistencies in COMP allocation.
In a Twitter post, the startup’s CEO, Robert Leshner, further clarified: “A few hours earlier, Proposal 62 went into force, altering the Comptroller agreement, which disseminates COMP to protocol participants. The revised Comptroller contract has a fault, resulting in too much COMP for certain users. The effect is limited, at worst, 280,000 COMP tokens,” as per the founder.
🚨 Unusual activity has been reported regarding the distribution of COMP following the execution of Proposal 062.
No supplied/borrowed funds are at risk — Compound Labs and members of the community are investigating discrepancies in the COMP distribution.
— Compound Labs (@compoundfinance) September 29, 2021
Proposal 62 and the new contract were written by a community member, with review from multiple other community members.
This is the greatest opportunity, and greatest risk for a decentralized protocol–that an open development process allows a bug to enter production.
— Robert Leshner (@rleshner) September 30, 2021
He also said that no money are at danger. He went on to say that the only danger is that some people got an abnormally high amount of COMP. In addition, the creator said that Proposal 62 and the new contracts were written by members of the community.
Following then, there were comments from additional members of the community. “This is the biggest potential, and the greatest danger, for a decentralized protocol–than an open development cycle enables a problem to reach production,” he said.
Leshner stated in the Twitter conversation that there are no administrative restrictions or community tools available to stop the COMP dissemination. Any modifications to the protocol must go through a 7-day governance procedure.
COMP has shed over 10% after the news of the issue broke. Data revealed a surge in selling pressure, causing the coin’s value to fall to approximately $270. Nevertheless, as of this writing, COMP is trading at $312. COMP’s market value has dropped by more than 10%. The token has also dropped by more than 16% in the last month. COMP has lost approximately 60% of its value since reaching an all-time peak of $910 in May.