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Compound’s problems in DeFi’s major money market are escalating, with nearly $ 150 million worth of COMP currently at risk due to a buggy protocol upgrade that went live last week.
On September 30, Cointelegraph reported that a bug caused users to mistakenly offer $ 70-85 million in COMP tokens to users after an update to fix bugs and the “COMP Reward Distribution divided ”has gone wrong.
While the rewards distribution error was quickly identified, Compound’s one-week delay in adopting new governance measures means the error will not be corrected until October 7.
On October 3, Compound founder Robert Leshner tweeted that 202,472.5 COMP (worth around $ 65 million) had been put at risk after the protocol’s drip feature was called up. for the first time in about two months.
The drip function makes the tokens contained in the compound reservoir available to users, with 0.5 COMP being accumulated by the reservoir per block. Leshner noted that “the majority of the COMP for users” is held in the tank.
This brings the total of the at-risk COMP to around 490,000, of which 136,000 are still in the controller, and 117,000 have been returned to the community so far (THANKS).
– Robert Leshner (@rleshner) October 3, 2021
SushiSwap developer Mudit Gupta took to social media to criticize the use of time locks on governance, saying about 100 people knew the threat posed by the drip function since the bug was discovered in the September 30, but were unable to act due to the protocol update delay.
Gupta also cautioned against the risks associated with scalable smart contracts, saying they are not suitable for “big guys.” [DeFi] primitive.
That’s why timelocks on everything aren’t always the best option. About a hundred people had known about this possibility since day one, but their hands were tied because of the timelock.
All of that 68.8m can be drained, not just a quarter if malicious actors are involved. https://t.co/xB5T1sjUQ8
– Mudit Gupta (@Mudit__Gupta) October 3, 2021
“I’ve come to see scalability as a bug more than a feature,” he added.
While Leshner’s tweet revealed that around 117,000 COMP worth $ 37.6 million were returned to the protocol after the initial incident, Yearn Finance developer Banteg valued that a third of the funds endangered by the drip function had already been claimed by users around 3:30 p.m. UTC on October 3.
Banteg estimated that the total value of COMP tokens endangered by the protocol bug is now $ 147 million.
Related: Hackers Exploit MFA Flaw to Steal 6,000 Coinbase Customers – Report
Despite the initial identification of the bug that caused the COMP’s price to drop rapidly by 3% from $ 330 to $ 286 on September 30, the token quickly recovered and traded above $ 340 on October 2, according to CoinGecko.
COMP has lost 7% of its value since reaching a local high of $ 347.5 on October 3, last changing hands to $ 322 at the time of writing.
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